Newcrest's gold mine operating amid strife

Newcrest's gold mine operating amid strife

MELBOURNE (Dow Jones): Australian gold miner Newcrest Mining
Ltd. (A.NEW) is operating its Gosowong gold mine on Indonesia's
Halmahera island with a skeleton staff after renewed civil unrest
on the tiny island, a company official said Thursday.

A violent dispute between the two villages of Kao and Malifut,
about 25 kilometers from the mine, is discouraging some 180 local
workers from turning up for work, Newcrest Mining Chairman Ian
Johnson said.

Nevertheless, Johnson is confident the dispute will be
resolved by the authorities before there is any production loss.

"It will be several more weeks before (Gosowong) faces the
slightest problem," Johnson told reporters after addressing a
meeting of shareholders.

Gosowong, which is 82.5 percent owned by Newcrest, is of key
importance to the company and is expected to contribute about
one-third of Newcrest's anticipated net profit in the fiscal year
ending June 30, 2000. Production at Gosowong first started in
July this year and the mine is expected to produce about 154,000
ounces of gold a year.

The mine is now being operated by 15 Australian staff and some
70 workers drawn from elsewhere in the Indonesian archipelago.

According to Indonesian press reports, three people died
Monday when the Kao-Malifut dispute degenerated into a brawl
involving up to hundred people armed with machetes, spears and
bows. That was despite the presence of 200 Indonesian troops
stationed in the area to keep the peace.

In August, similar violence forced Newcrest to shut down the
Gosowong mill for five days.

At the center of the dispute is the Malifut villagers'
presence on the island. The Malifuti hail from Makian island but
were settled on Halmahera in 1975 after the Kie Besi volcano
eruption on Makian. It now appears the Kao want them off
Halmahera.