“I think it will take a fair amount of stomach for people to make a decision about mining in Indonesia,” Burston said.
“Taking gold, for example, if the spot price of gold was to recover and stabilise higher than it is now then I believe people would go and mine there.
“But there is the double whammy in Indonesia - there is the question of the economic certainty of the product, the security of the tenure in the grounds where you set up your operation and the predictability of the relationship with the host country.”
But Aurora has no immediate plans to pull out of Indonesia.
“We desire to keep operating there,” Burston said.
“We’re saying let’s be consistent about the fact we have contract agreements and at this stage of the game there is nothing to indicate those contracts will not be upheld by the Indonesian Government.
“There are certainly issues at a lower level of law and order.”
And it is these regional disputes that are immediately effecting production at Mt Muro in Central Kalimantan and Toka Tindung in Sulawesi.
Production at Mt Muro has begun to steady at 57,306 gold equivalent ounces last quarter, but illegal mining has continued to threaten both mines.
Toka Tindung was put on care and maintenance last quarter due to problems with illegal miners using mercury to extract gold from ore.
Indonesian provinces striving for regional autonomy under the Wahid Government resulted in the disintegration of law and order across the archipelago.
“Law enforcement agencies have been hesitant to assert themselves as they had done in the Suharto regime.” Burston said.
“It’s not easy when we have a big exploration project in Sulawesi when you see the difficulties with illegal mining and the resulting environmental damage.”
According to Burston there is no immediate threat in Indonesia but he does concede things get uneasy from time to time.
“Aurora is trying to make a fist of the business in a holistic fashion,” he said.
Burston said Aurora had begun to recover from the chaos in Indonesia last October so this was an appropriate time for him to move on.
“If it is going to be a five or ten year program to build the business back to other levels, I’m certainly not going to be doing it when I’m 75,” he said.
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