East Java mine in Quantum’s sights

Hong Kong-based private equity firm Quantum Pacific Capital is taking on the dispute over the ownership of a $5 billion copper and gold project on the Indonesian island of Java.

The company is in talks to get back as much as 80 per cent of the project on behalf of the previous owner and ASX-listed company, Intrepid Mines, according to The Age.

Quantum, which has a 5.4 per cent stake in Intrepid and has plans to dismiss five of its seven directors, has backed its approach of attempting to get board control even though it said Intrepid’s contracts with its Indonesian joint venture partners were void and that the project was not legally theirs in the first instance.

Quantum has organised an EGM on June 20 to throw out a majority of the board, and backed this decision, saying Intrepid was acting like a ‘bull in a china shop’ with Quantum to follow a different tactic.

“We have gone in and tried to sit down with the new local title-holders, and that has gone over well and we have confidence that there is a negotiated deal to be done here,” Quantum managing director Greg Mazur said.

Mazur said in a press conference on Monday the company was in talks with the project’s new owner, Indonesian billionaire Edwin Soreyadjaya since mid-2012 and the Indonesians were ready for a ‘negotiated solution’ to the legal problems.

“Unfortunately the current board of Intrepid has pursued a strategy that has not gone over well with the local title-holders and that strategy has been a very public, hostile, legal based strategy to try to get some assets back.”

Intrepid shares fell last year, wiping hundreds of millions of dollars from the company’s value, when its partner in the Tujuh Bukit project in East Java relocated the asset to a new company controlled by Soreyadjaya.

Although he believes the copper/gold project was never legally Intrepid’s, he said the ASX-listed company was still the best avenue from which to negotiate with the Indonesian partners, Mazur said.

However Intrepid said Quantum is not experienced in handling mining projects in Indonesia and are short-term investors.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.