Newmont goldmine closure plan

Newmont goldmine closure plan

With regard to the news article titled Newmont to close
Minahasa gold mine (March 9) its erroneous premise has caused
considerable confusion within Indonesia for little reason, and
may have unfortunate effects outside the country as well.

PT Newmont Minahasa Raya (NMR) will not be closing any sooner
than the depletion of the Mesel Pit Ore Body, currently scheduled
for 2003. The contract of work signed with the government for PT
NMR was set at a standard 30 years.

But that doesn't mean that the ore body covered by the
contract of work will last that long. Indeed, ore bodies have
finite time periods of exploitation.

Once the ore is gone, the mining is finished and reclamation
activities commence. So the length of time required for mining
and the length of the contract with the government covering any
specific mine are two entirely different things, and are more
frequently different than not.

The regency, provincial and central governments have known for
some time now that PT NMR is nearing the end of its mining
activities at the mine site.

It is possible that the story started as a simple recitation
of facts and somehow grew into "news", or that someone in the
regional government may have misunderstood information provided
to them about the company's upcoming mine closure plan
presentation.

Either way, The Jakarta Post unwittingly perpetuated a non-
story that was then picked up by both the Bloomberg and Bridge
News Services in the United States and run on their wires as a
breaking development.

As you can imagine, the news caused quite a stir with Wall
Street analysts who cover the mining industry and because of the
reasons that the Post erroneously cited for the "closure", the
story may further erode investor confidence in Indonesia.

I understand how confusion may have been created by the
difference between the Contract of Work and the actual life cycle
of the mine. What I don't really understand is why the Post
applied an angle in the text of the story that is clearly
contravened by the company's spokesman as he was quoted.

He said that the mine was closing because of the depletion of
the resource and at no point did he say that the mine was closing
19 years earlier than originally planned.

Your story led the readers to believe that we were closing for
reasons other than the depletion of the ore body and that is not
the case.

EDWARD PRESSMAN

Director for Technical Affairs

PT Newmont Pacific Nusantara

Jakarta

Note: The news item was based on a report from the Antara news
agency.

--Editor