Australia’s Intrepid Mines Ltd. entered into an agreement with Indonesia’s Indo Multi Niaga in 2008 for stake in the Tujuh Bukit deposit in East Java. Indo Multi was sold to a new owner and the new holder of the project license, Bumi Sukses Indo controlled by Indonesian businessman Edwin Soeryadjaya, in 2012. The mining license was transferred to a separate entity, dishonoring the agreement between Indo Multi Niaga and Intrepid. Intrepid claims it had already spent A$95 million to develop the project.
Hong Kong-based private equity investor Quantum Pacific Investment Ltd., which represents a group holding 5.4% of Australia’s Intrepid Mines Ltd., thinks it can negotiate a new deal with Bumi Sukses Indo better than Intrepid itself. Unlikely to happen without any leverage on the operations.
Quantum Pacific claims the current Intrepid board has pursued a strategy that has not gone over well with the new title holders. Instead of going in as a bull in a china shop, Quantum Pacific has gone in and tried to sit down with the new local title holders and that has gone over well, and we have gotten confidence that there is a negotiated deal to be done.
Quantum Pacific is seeking to remove five Intrepid directors, including Gordon, at a shareholder meeting on June 20 and thinks a new leadership could recover a stake in the Indonesian asset in six to nine months.
This is exactly what Edwin Soeryadjaya wants - the foreign investors fighting each other while he moves forward with his own plans without them.
Like China before it, Indonesia plays by its own rules. If you are a foreigner expect to get fleeced unless they have continuous control and leverage over the operations. This means controlling the money and the licenses. Anything less is amateur hour at the comedy club.
"Quantum Says Can Recover Intrepid Indonesia Stake With New Team", The Jakarta Globe, May 20, 2013
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