Newmont facing financial crisis

MANADO, North Sulawesi: The world's second largest gold mining company, U.S.-based Newmont Mining Ltd, is experiencing a financial crisis following a decline in the price of gold in the world market from US$400 to $300 per troy ounce, a company spokesman said.

Andre Gillam, vice general Manager of PT Newmont Minahasa Raya (NMR), spoke of the troubles at a meeting with 200 members of the North Sulawesi chapter of the Association of Government Public Relations Officers (Bakohumas) at the company's base camp in the village of Ratatotok in Minahasa district Wednesday.

According to Gillam, as a consequence of its financial crisis, the company was compelled to introduce various economizing measures, including laying off 500 of its employees in the United States.

The company's head office in the United States was also going through a monetary and economic crisis, he said.

Newmont also operates in China, the Philippines, Kazakhstan and Mexico with worldwide production of about 123 tons of gold a year.

Gillam said that in addition to its mines in Minahasa district, the company also had a concession in Batu Hijau, Sumbawa.

The company had invested about $132 million in Minahasa and $2 billion in Batu Hijau.

Its mines in Minahasa started production in 1997, with the concession to expire by 2002. In Batu Hijau, production will start in 1999 based on a concession that would be valid for the next 20 years.

To run its venture in Minahasa, Newmont was employing 650 workers while in Batu Hijau it would hire 2,200 workers.

On the same occasion, Ferry Lumentut, head of NMR's administration division, said that in 1998 the company paid more than Rp 65 billion in taxes and other financial obligations to the Indonesian government.