Newmont extends gold mine production to 25 years

JAKARTA (JP): Gold mining firm PT Newmont Nusa Tenggara, a subsidiary of the giant Newmont Gold Company from the United States, has extended the planned production period of its gold mine on Sumbawa island, West Nusa Tenggara, by five years to 25 years, a company executive said on Tuesday.

"We have a long-term investment commitment to Indonesia. By applying a world-class standard in mining and the environment, we shall be able to extend the lifetime of the gold mine to 25 years from 20 years," company executive director Richard B. Ness said on Tuesday during a hearing with House of Representatives Commission V for mines and energy.

During the hearing, Ness briefed commission members on progress made in the development of the company's gold mine in Batuhijau, Jereweh district, Sumbawa.

"Thus far, we have worked 60 percent of the construction phase and expect to complete construction by Oct. 1999. We have thus far invested US$1.3 billion in the project and employed 14,000 people," Ness said.

Ness said the company would invest a total of $1.9 billion before starting production by the end of next year.

Newmont signed a fourth generation Contract of Work (COW) in Dec., 1986, to develop gold resources over 197,000 hectares of land on the islands of Lombok and Sumbawa.

In May, 1990, the company discovered a deposit containing 420 metric tons of gold and 5.9 billion tons of copper in Batuhijau.

The Batuhijau project, which is currently thought to be the world's largest start-up mining project, will eventually produce 600,000 tons of ore per day, seven days a week, and will employ 4,000 people at peak operation.

The operation will leave behind a pit measuring two kilometers in width and one kilometer in depth, Ness said.

The company is 45 percent owned by Newmont Indonesia Limited, 35 percent owned by Japan's Nusa Tenggara Mining Corporation and 20 percent owned by PT Pukuafu Indah. Nusa Tenggara Mining Corporation is 78.6 percent owned by Sumitomo Corporation, 14.3 percent owned by Sumitomo Metal Mining Co. Ltd and 7.1 percent owned by Mitsubishi Materials Corporation.

Newmont Indonesia also owns the rights to a gold mine in Mesel, Minahasa, North Sulawesi, which is believed to contain 1.9 tons of gold. PT Newmont Minahasa Raya started work at the Mesel mine in 1997.

Ness said that Newmont Nusatenggara would carry out 25 community development programs near the Batuhijau gold mine over the next two years. It has also set up a foundation to assist infrastructure development and to support public enterprises in the area to help the local economy develop sustainably. (jsk)