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Family minefield clouds gold issue

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SCMP Reporter

MINES and Energy Minister Sudjana must have breathed a sigh of relief last week when he finally announced a resolution to the Busang gold mine saga.

The minister, a stodgy ex-military man not known for his dynamism, quickly read out the names of the winners in the race to develop the mine, the world's richest gold discovery this century, at a long-awaited media conference last Monday. He then grabbed his papers and almost fled the room.

Mr Sudjana was not the only one who found himself in over his head in the Busang II affair. What began as a small Canadian company's quest for a partner erupted in a first family squabble apparently quelled only by the entrance of President Suharto in the person of his close friend, businessman Mohammad 'Bob' Hasan.

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Analysts say the affair shows the lengths to which individuals in the first family, from the children up to Mr Suharto, are prepared to go to secure a stake in almost every important industrial and business sector in the country. And they warn that during the stampede, outsiders - particularly foreign investors - can expect to have their toes crushed.

Mr Suharto's involvement, they say, has further blurred the line between Government and industry - a line they expect will become even fuzzier as the president consolidates his business empire before a possible seventh five-year term in office from next year.

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'It's a very big issue because of the extent of first family involvement and the lack of an open bidding process,' an analyst with a Hong Kong-based securities firm said.

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