Newmont says committed to mining in Indonesia
Date: 04-Nov-04
Country: SINGAPORE
Author: Lewa Pardomuan
Indonesia's new government could bring positive changes to the country's mining sector, including fresh opportunities for investment, Doug Hock, a spokesman for Newmont, said yesterday.
"As with many companies and groups in Indonesia, Newmont is hopeful that the new government will improve the investment climate in Indonesia," Hock said.
"Newmont intends to remain a long-term player in Indonesia," he said in a written reply to questions.
PT Newmont Minahasa Raya, a unit of U.S.-based Newmont, is under investigation over accusations its gold mine dumped toxic waste into Buyat Bay in North Sulawesi, 2,200 km (1,400 miles) from Jakarta, and poisoned local residents.
The company has denied the allegations, saying it followed government regulations.
Analysts said they expected investment in Indonesia's mining sector would increase after the election last month of a new president, Susilo Bambang Yudhoyono.
Newmont operates Asia's second-largest copper mine, Batu Hijau, on Indonesia's Sumbawa island, which Hock said had a mine life of more than 20 years.
"We also have ongoing exploration projects in various parts of the country," he said.
The gold mining case in Sulawesi became a diplomatic issue after the five Newmont officials - an Australian, an American and three Indonesians - were detained by the Indonesian police in late September.
They were released from a Jakarta jail less than two weeks ago but have been put under city detention in Manado, the provincial capital of North Sulawesi, and must report regularly to police.
The U.S. embassy has said the detentions were inappropriate and could harm Indonesia's investment climate. But Newmont, which this week reported a 12.5 percent increase in its quarterly profit due to higher gold prices, was upbeat.
"While the investigation is ongoing, Newmont will continue to cooperate as it has from the beginning. At this time, there is no plan to take legal action against the police," Hock said.
Newmont Minahasa Raya stopped mining gold at the North Sulawesi site in late 2001, but continued processing stockpiled ore until August this year.
Reclamation, monitoring and management activities will continue for at least three years.
Hock said Minahasa Raya and Batu Hijau together would contribute 460,000 ounces, or 6.6 percent of Newmont's overall equity gold sales worldwide in 2004.
Miners have complained it is getting harder to do business in outlying islands in Indonesia.
Investment in mining in the world's largest archipelago has slumped because of vague regulations, competition from illegal mining and strict environmental rules.
Charges of violating environmental regulations carry jail terms of up to 15 years if people are proven to have died or become seriously ill as a result of pollution, police say.
Tests taken by Newmont, independent groups and government agencies have come up with varying readings on pollution in the bay. There are also disputes over whether any pollution came from Newmont or from other operators in the area.
