Explorer exploits Suharto link after law changes
Panji Suharto, a grandson of former Indonesian military strongman Suharto, has toured Australia, promoting a small ASX-listed mining exploration company to retail investors.
Western Mining Network has enlisted the help of Panji Adhikumoro Suharto, saying it is essential to have a well-connected Indonesian partner to help navigate the country's shifting and complex regulatory and business environments.
When asked about his contribution to the company, Mr Suharto said: "I know a lot of people in Indonesia and I can get a lot of information from the Indonesia side."
Executive chairman of Western Mining Chris Clower said that "having a right partner is important, so that when you do create something of value, it doesn't get taken away from you".
"It is not about the black market, it is about making sure that we are not vulnerable."
The south-east Asian country last year introduced a spate of mining laws which limit foreign ownership of resource assets and banned the export of 14 unprocessed metal ores including nickel, bauxite, manganese and iron.
Following the introduction of the new foreign ownership law, the Australian ambassador to Indonesia, Greg Moriarty, used a speech in May last year to warn publicly of the rising tide of economic nationalism in Indonesia, especially for Australian exporters and investors in the country.
Mr Clower said Mr Suharto's intelligence-gathering skills were crucial in the murky world of Indonesian business, with its constantly changing goal posts.
He said it was important to "understand where wriggle room is within the regulations" and "to get a sense where the law is going to go".
He highlighted the pitfalls of not having the right partner and mentioned the woes of British resources company Churchill Mining, which is involved in a protracted legal battle with Indonesian authorities after it lost a $1.8 billion coal tenement in Indonesian Borneo (Kalimantan).
Similarly, Brisbane-based Intrepid Mines was also elbowed out of its project in Indonesia by its local business partner and its share price hammered when its workers at the Tujuh Bukit mine site were told to leave.
Gregory Sarkissian, managing director of Borneo Brothers, the largest shareholder in Western Mining, said such pitfalls could be avoided, saying the Suharto name still carried a lot of weight in Indonesia.
"When I go to places, when people know that Panji's family is involved, they don't want to make any trouble and go out of their way to help."
However, Professor Tim Lindsey, an Indonesian law expert at the University of Melbourne, said the Suharto name carries very little political currency in modern Indonesia.
"The Suharto name does not glitter in Indonesia. Remember that when Suharto died he was facing corruption charges," he said.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free