MINING and forestry contracts in Sabah issued by the Barisan Nasional government will be reviewed for violations, Chief Minister Mohd Shafie Apdal said today.

This would help the state end private control on natural resources, he told the Sabah legislative assembly today.

Shafie said the government had discovered that state government-linked companies had been on the losing end in some of these deals under the previous regime.

He cited a contract gazetted as a “mineral lease” given under BN to a private firm to mine for gold in Tawau last year involving 946ha of land in a first-class reserve.

“First-class reserves are meant for water catchment but this was handed to South Sea Gold Sdn Bhd.

“This is what worries us. (Contracts in ) first-class reserves should not be given directly to a private firm. This is why we need to review the gold mining agreement,” he said.

Shafie said the firm had also not paid the full 5% royalty due to the state after raking in RM65 million since beginning operations in 2018. 

 “Up until July, the firm has produced over 378.08kg of gold valued at 65,069,122.61. The amount of royalty is RM3,253,456.19. 

“Only RM1,335,697.39 has been paid, leaving a balance of RM1,917,758.80.” 

He also questioned why the BN government had not negotiated a higher royalty, compared to Kelantan, where the state government receives 10% in royalties from gold mining.

Shafie said in Kelantan, gold mining firms paid the government royalty 30% in gold bars and 70% in cash. 

“Why did the past (Sabah) government not negotiate a better formula like this,” he said. 

Shafie was responding to a supplementary question by Jeffrey Kitingan (Tambunan-STAR) on the state’s authority over forests and land as stipulated in the Federal Constitution. 

In the future, Shafie said the state government will not allow private firms to have full control over mining and forestry ventures.

However, Shafie said not all the contracts could be reviewed or terminated because of clauses in the agreements. – August 6, 2019.