KEM prepares to close Kalimantan's gold mine

KEM prepares to close Kalimantan's gold mine

By: Mochammad N. Kurniawan

KELIAN (JP): With three years to go until the closure of its
gold mine in Kelian, Kutai Barat regency, East Kalimantan
province, PT Kelian Equatorial Mining (KEM) is planning several
programs to convert its mining site into different land uses.

John Miller, KEM's general manager for employee and community
development, said that the company's plan would include
converting the pit and storage areas into lakes for tourism and
fishing, the processing plant and administration office into a
mining education center.

"We want to leave here with a good impression, therefore we
will do our best to rehabilitate the site of our mine," he told a
group of journalists, including The Jakarta Post, who visited the
company's mining site last week.

He added that the so-called "post-mining programs" were part
of the company's obligation after it had mined the area's gold
resources for years.

At present, the company is finalizing the plan with the local
government, local people representatives, Samarinda-based
Mulawarman University and some nongovernmental organizations
(NGOs), he said.

"We will conclude a final plan in 18 months," Miller said.

KEM commenced its gold mining operation in 1992 in Kelian, 400
kilometers west of the capital of East Kalimantan, Samarinda,
after the discovery of mineral reserves in 1989 estimated at some
85 million tons.

The reserve has an average gold content of 1.9 grams per ton.

KEM's mine covers about 1,300 hectares of the total 18,333
hectare concession awarded to the company under the 30-year
contract of work with the Indonesian government.

KEM, which is 90 percent owned by Anglo-Australian giant Rio
Tinto and 10 percent by PT Harita Jayaraya, has estimated the
area's gold reserves will no longer be economic for exploitation
after 2004.

However, the company plans to cease the operation one year
earlier.

The company had removed and extracted a total of 250 million
tons of waste rock and ore until last year, creating a large pit
300 meters deep, 1.2 kilometers long and 1.1 kilometers wide.

Last year alone, the company removed and extracted 25 million
tons of rock and earth, including 6.2 million tons of ore, which
is earth containing gold and silver.

The 6.2 million tons of ore were crushed, milled and treated
in a conventional cyanide carbon-in-leach process plant to
produce 10.5 tons of gold and 10.1 tons of silver.

The remaining waste or tailings, containing dangerous cyanide
and manganese substances were disposed of in the Namuk tailings
storage area.

Miller said KEM planned to change the mining pit into a lake
for tourism activities or fisheries by channeling water from the
adjacent Kelian River.

The company would treat water in the lake using chemical
procedures to ensure that the hazardous metal content such as
manganese would drop below national and international
requirements, he said.

"With a safe level of metal content, the lake will be quite
attractive for tourist activities or for fisheries," Miller said,
adding the same treatment would also be applied at the Namuk
tailing storage area.

According to KEM's data, manganese levels at the Namuk tailing
storage area amounts to 2.51 milligrams per liter, while last
year the cyanide content was recorded at 0.01 milligrams per
liter, both below international standards.

Miller went on to say that the processing plant and
administration office was planned to be transformed into a mining
education center for local universities.

With KEM planning to leave many mining facilities in the area,
the place could become an ideal place for a mining education
center, he added.

Miller said aside from programs to convert its mining site,
the company was also running several programs to rehabilitate
environmental damage caused by its operations and to develop the
welfare of local communities.

He said the company had allocated about US$45 million to
complete all the programs.

The company would supervise the running of the programs until
the local government take over responsibility in 2007, he said.

Currently, KEM has planted trees in about 954 hectares of the
damaged forests affected by its mining activities.

It has to complete its remaining obligation to rehabilitate
331 hectares of forests.

KEM has also given its employees some compensation and
prepared them with training to develop alternative income after
the closure of the mine, but the company did not disclose the
amount of compensation.

It has also trained about 70 groups of local farmers, mainly
from Dayak tribes, in entrepreneurship to provide them with
credit to start business.

The community development programs include soya beans, chicken
farming.

Flora Dangin, a 32-year-old Dayak woman, said the farmer
group, of which she was a member, had managed to collect higher
revenue thanks to modern techniques of farming soya beans taught
by the company.

"It's good for the beginning, later on we hope each member can
grow soya beans in his or her own farm," she said.

She said her farming group could now harvest soya beans three
times a year, while in the past they could only harvest the
commodity once a year using the traditional technique.

Syamsi, a truck operator at the mine, said that he was
satisfied with the company's compensation.

"I think all employees would agree with me that the
compensation is high enough," he told the Post.

He added that he planned to use the compensation to establish
a land transportation business in the province's oil town of
Balikpapan.