Payoff settles mining dispute

By Libby Middlebrook

Australian-based miner Cue Energy Resources will pay Norwegian company Saga $US2 million ($3.9 million) after a dispute over an Indonesian gas field.

In May 1997, Cue agreed to buy Saga's 50 per cent holding in a large Indonesian gas field, but when the company failed last year to get Government approval to mine the area it terminated the contract.

Saga disputed Cue's right to end the agreement and sought $US32 million in compensation.

In an out-of-court settlement Cue, which is listed on the New Zealand Stock Exchange, agreed to pay Saga $US2 million as well as issuing the company 8.7 million ordinary shares.

Cue chief executive Bob Coppin said the Indonesian economic crisis meant the company could not gain the necessary consents for mining.

"The economic crisis had affected gas sales and it became increasingly obvious that we weren't going to get the consents we needed."

Mr Coppin maintained the company was within its rights to terminate the contract as it was conditional on consents approval.

Saga and Cue will jointly seek $US1 million from the current owner of the Indonesian gas field relating to set-up and operating costs.