Indonesia's "king of mining" eyes biggest bet yet

By Fitri Wulandari

JAKARTA (Reuters) - Yusuf Merukh, an Indonesian politician-turned-businessman, is nicknamed the king of mining after the 500 concessions in his portfolio, but his latest venture could dwarf the rest.

Despite the bursting of the commodity bubble, his unlisted Merukh Enterprises plans to push ahead with what has the potential to be one of the world's largest copper and gold mines, on Lembata, a dot of an island off Flores in eastern Indonesia.

But the project is controversial. Merukh says the site has preliminary reserves of 136.1 billion pounds of copper and 80.3 million ounces of gold but some media reports have questioned the actual size of the deposits.

At $17 billion, the cost of development is also being criticized, while environmental and community groups have raised concerns about the project's impact.

"I reject the project. Its mining potential is unclear," former Environment Minister and current member of the parliamentary mining committee Sonny Keraf said.

Reuters was unable to obtain records of the gold and copper resources in Lembata from the relevant departments in the Energy and Mines Ministry.

Merukh, 72, keeps a low profile and is rarely seen at the big mining industry gatherings, said one executive who didn't want to be identified by name.

He was born on the Indonesian island of Rote, in East Nusa Tenggara, and was a politician for many years during which he sat on a parliamentary mining committee and worked as a top government agrarian official.

In a rare interview with Reuters earlier this month, Merukh said that his group will start to invest in infrastructure for the Lembata project next year, but declined to say where he would get the funding.

Indonesia has some of the world's largest deposits of gold, tin, copper, and nickel, and leading global mining firms, such as Freeport-McMoran Copper & Gold (FCX.N) and Newmont Mining Corp. (NEM.N), operate in the country.

But its big mining projects don't always live up to the hype.

More than a decade ago, Merukh had an interest in the Bre-X gold mine project in Kalimantan. Bre-X was touted as one of the world's largest finds, but turned out to be a huge hoax.

Indonesia's mining projects have also often been the source of conflicts because of the impact on the environment and local populations, especially when it comes to the distribution of the proceeds.

"We are last to benefit from a project. Number one is the local people," said Merukh.

On the Lembata project, the predominantly Catholic population of roughly 100,000 will have to be relocated.
Many of the local people lack the skills to work on the mining project, so Merukh plans to bring in outside workers who will be housed on a nearby island in order to reduce the risk of conflict with the local population.

Merukh, who is worth $174 million according to the Indonesian business magazine Globe, initially studied agriculture and spent time in the United States at Texas A&M university.

He was a supporter of Megawati Sukarnoputri early on in her political career, according to Globe, long before she became Indonesia's president in 2001.

His early business ventures included chrome exploration, but he moved into gold concessions when the price was far below today's level of about $845 an ounce.

"He is the first Indonesian who has held so many mining concessions," Hartojo Wignjowijoto, an economist who has known Merukh for many years, told Reuters.

"At first, I thought he was just trading mining licenses, but he proved to be a good mining partner (for foreign investors). He's shrewd. But he's shrewd for the national interest, and patriotic."

Merukh said he was optimistic demand for copper from the car and electronics industries would hold up despite the slump in commodities. Copper prices have tumbled almost 70 percent since hitting a record high of $8,940 a tonne in July.

"As long as the industry is still there and still alive, they still need copper," he said.

Jeddah shops pin hopes on returning pilgrims

JEDDAH: Jeddah's shopping malls, souqs and outlets are looking forward to a promising period of business with the steady return of pilgrims.

Several pilgrim groups brought by private tour operators, who arrived in the city and stayed in hotels before Haj, have started returning here either directly from Makkah or via Madinah at the end of the annual pilgrimage.

Most of the starred hotels said yesterday that the pilgrims chose to extend their stay here for a few days for shopping. “After all, they would like to buy something for themselves or carry gifts for their near and dear ones back home,” a hotel executive said.

"We had a golden period in the past when we did much of our business in the post-Haj period. That was when Haj pilgrims arrived here and finally departed from here. But this practice being no more, we have to depend on the groups of pilgrims brought by private tour operators who stay here before returning home,” Abdullah Ibrahim, an electronics shop supervisor in downtown Balad said. “Yet, the post-Haj business for us is satisfying,” he added.

A tour around the main shopping areas in Balad and some of the souqs and malls last evening showed a hectic activity among the shopkeepers to receive the pilgrims. After the three-day Eid Al-Adha holiday, almost all the shops and outlets have reopened. The Souq Al-Alawi street market, which winds through much of old Jeddah, is one of the major attractions for the pilgrims. “This is my first Haj and I want to carry something that is unique,” said Abdul Hameed Saefullah, an Indonesian who operates a restaurant in Jakarta. “I intend to buy some Turkish rugs and Iranian saffron,” he added.

A major reason why so many Haj pilgrims flock to Balad is that it has a number of souqs and is also home to the city's largest public transport depot. Buses come in from all over the Kingdom and from around the region. What is more, SAPTCO operates regular international bus services between the Kingdom and some of the neighboring countries including Turkey, Syria, Jordan, Qatar, Kuwait, Bahrain and the UAE.

Gold and jewelry dealers at Balad and Kandra said their business often doubles in the post-Haj period. “This is a dedicated market for gold and jewelry and pilgrims who are keen on buying precious ornaments do make it a point to visit us, as our prices are competitive,” Abdul Khaliq, a jeweler at Kandra said. “Our country is sitting on gold, but we haven't seen the kind of gold markets you have. I am currently window-shopping, but have plans to make some gold purchases here,” Abdullah Mahdi, a pilgrim from South Africa said.

Vendors with counterfeit products in downtown and other city markets were also seen crowded with pilgrims interested in buying sunglasses, binoculars, handbags, mobile sets and watches, some of them bearing the names of expensive brands. “Some pilgrims are buying large quantities of handbags and watches, which they resell back home,” a vendor remarked.

“I have heard a lot about Jeddah’s open-air souqs and pedestrian bazaars, as well as the most modern shopping malls,” said Yusuf Mustafa, an Ethiopian pilgrim. “This is my first Haj and my effort is to visit all of its major souqs and malls and carry home some best bargains,” said Mustafa who works in a private company in Addis Ababa. “I will also be touring Tahliah Street, which has some of the best known outlets for fashionable and designer brands,” he added.

“I am looking for souvenirs like prayer beads, prayer rugs, Arabian teapots and attars (Arabian perfumes),” said Maaroof Rafeek, a Sri Lankan pilgrim, while he was shopping at Hera International Market. “I will also be carrying some dresses for my children,” he said.

Ibrahim Mugni, who sells prayer beads, at Bowadi souk in north Jeddah, said: “Prayer beads are very much in demand and tens of thousands of them are sold in the post-Haj period.”

A couple of Canadian pilgrims of Pakistani origin said shopping here was great and in spite of their short stay they would shop and visit the picturesque Corniche to see the sun setting and spend some time at the beach.

Ahmed Muhammad, a textile shop owner at Bani Malek, said: “The going is great for him. Many pilgrims come to me to buy fabric as I stock a variety of material from different countries. Children’s fabric and dresses are usually in great demand.”

Five and 10-riyal shops at various locations including at Balad and Al-Rawdah Street are being thronged by pilgrims for cheap products. Likewise, money exchanges at Balad are being visited by pilgrims for exchanging their currencies.
Source : Arab News

Construct A New Currency

The crisis in Asia and Latin America has been the economy and threaten the stability of developing countries, even the 1997 crisis and 1998 is a threat to the entire world economy. Mid-1997 crisis is also in Indonesia, even Indonesia is a country that suffered the most severe. Economic growth in previous years around 7% per year until the sharp slump - 13.7% and inflation reached 77.6% in 1998, which begins, the occurrence of the exchange rate fluctuation in July 1997. Europe tried to prevent the crisis by creating joint currency, the Euro, which initially lower the value of the U.S. Dollar, Euro, but now the value is higher than U.S. dollar. In 2008, the United States also experienced a crisis that affects the entire world crisis, the United States because of trade with other countries using the currency of dollars the United States.
Learning from Europe, the Middle-East countries and Asia can also make a joint currency, for example, political or Dirham. Dinar is the currency in the Roman era and Dirham is the currency in the Persian era. Trade is the basis of the economy in Arabia before Islam came. Prerequisite for the transaction is the means of payment that can be trusted. Arabia and neighboring areas are under the direct authority of Persia and Rome. Unit of the money is used countries is the Dirham and the dinar. In the transaction of business Arabia in the second type of currency is also accepted. With more strong political both countries, the payment instrument is more trusted in the region that are under the influence of power. Because of that factor, the Persian nation and the nation's Roman is the only trading partner of the Arab people (Sadr, 1989).
Dirham coin and the dinar has the weight and still have the content of silver or gold that remains. However, during the dynasty Umayyah and weighing Abbassiyah dynasty changed, so also in the Persian own. In the period after Islam, the content of silver coins Dirham between different areas of one to the other, but in the early Islamic period has been fixed. At this time the amount of charity gold and silver as mentioned in the book is based on the severity of the holy Dirham and the dinar coin set in the early Islamic period (Kattani, 1975:413). Value of one dinar equal to ten Dirham (Sadr, 1989). But in the Dynasty Fathimiyah namely in the Al-Hakim bin Amrillah dinar price equal to 34 Dirham because many Dirham mixture (Al Maqrizy, 1988:70-80). In dinating the Ottoman period, the official financial system Utsmaniah since 1534 Base on the goods in gold and silver mines, with 1:15 (Imarah, 1993:101). In addition dinar and Dirham, there is money to meet the needs for goods sales slightly cheaper price of one Dirham or part of the Dirham, because the first since up to now people need a tool to exchange other than gold and silver. To meet the needs of the purchase of cheap goods, they print a few of copper in the process of small pieces of money given name (copper cash) (Al Maqrizy, 1988:90). Value of money compared Dirham in the early Islamic period is 1: 48 (Al-Hallaq, 1986:17). Value does not keep the money to increase the copper Dirham in the year 756 H with a ratio of 1: 24 (Al-Sayuthi, 1975:104).
Dinar and Dirham is the currency stable world from the beginning of Islam until now. Inflation in 1400 after years is zero. The price of chicken in the Messenger of Allah s.a.w. 1 Dirham and now is still about 1 Dirham (Vadillo, 1998). Dinar currency is ideal to facilitate and improve international trade and minimize speculation in the paper money that can trigger the Asian currency crisis of 1997. The existence of a fund unity between the countries of East and Central Asia will increase the quantity of trade between the countries in the region and help enhance economic development if the condition of providing money dinar were successful. Currency idea to help minimize the gold dinar currency hagemoni dollars the United States and once again use the dinar as an international currency because the value of paper currency continues to fluctuate sepertimata not have the money value of gold is stable and durable, their value is the value of the metal itself.

The Property

Al-Maal (property) in Arabic means gold, silver and livestock. Meanwhile, according to the terminology of sharia, al Maal is anything that has value and can be obtained and ownership by the appropriate sharia.
Prophet Muhammad s.a.w. look in the property based on the fact that, property is owned by God and man is given the power (trust) to manage properly. Humans do not have the absolute power of wealth and property must spend part of God according to sharia, such as in the Qur'an Al Hadiid paragraph 5 - 7: To Him belongs the kingdom of heaven and earth. And to Allah all matters. He entered the night into day and day into the night. Knowing him and all the breasts. Believe in Allah and His Messenger, and donated part of the wealth that God has made you. But those who believe in you, and donate part of the property are those who believe. Similarly, the Qur'an, Al Munaafiquun paragraph 7: They were people who said (to those Anshar): "Do not give shopping to the people (Muhajirin) in the Messenger of Allah so that they disperse (leave the Messenger of Allah) ". Even Allah belong the treasures of heaven and earth, but the hypocrites do not understand.
He also suggested that property is not outstanding on the rich only. "What are the property of the loot given to Allah, His Messenger, which comes from the residents of the cities it is for Allah, His messenger, the messenger relatives, orphans, poor people and those in the travel, so that the property is not only circulating among the rich only between you. What is the messenger to you, then accept it. And what the effect of prohibiting and leave for the fear of God. He is very hard Punishment "(Al Hasyr 7). Even, God forbid to stockpile wealth. "Woe to every slanderer again detractor. , Which collects property and calculated. He spent that it can make a lasting "(Al-Humazah 1-3.

Sale of Gold and Silver Against Gold and Silver

If gold is sold against gold, and silver is sold against silver, whether it is in the form of coins or otherwise, if the weight of one of them is more than that of the other, the transaction is haraam and void. If gold is sold against silver, or silver is sold against gold, the transaction is valid, and it is not necessary that their weight be equal, but if it is sold on credit or stipulated time, the transaction will be void.
If gold or silver is sold against gold or silver, it is necessary for the seller and the buyer that before they separated from each other, they should deliver the commodity, and its exchange to each other. And if even a part of the thing about which agreement has been made, is not delivered to the person concerned, the transaction becomes void.
If either the seller or the buyer delivers the stock in full as agreed, but the other person delivers only a part of his stock, and they separate from each other, the transaction with regard to the part exchanged will be valid, but the person who has not received the entire stock can cancel the transaction.
If silver dust from a mine is sold against pure silver, and gold dust from a mine is sold against pure gold, the transaction is void, unless one is sure that the quality of silver dust is equal to the quantity of pure silver. However, there is no harm in selling silver dust against gold, or gold dust against silver, as mentioned earlier.