Newmont is on right track: Official

Apriadi Gunawan, The Jakarta Post, Medan, North Sumatra

A senior official rejected on Tuesday accusations by local non- governmental organizations (NGOs) that mining company PT Newmont Horas Nauli had carried out gold explorations in a protected forest.

Washington Tambunan, head of the mining office at the North Sumatra provincial administration, said the office had cooperated with colleagues from the forestry office and investigated the charge, but had found nothing wrong with the exploration.

"We found that the company is exploring gold in an area not within the borders of a protected forest, so it is not violating any laws," said Washington.

Newmont has been exploring gold since last year in an area in Batang Toru, South Tapanuli regency.

Initially, the company's operation met with hostility from local NGOs and others, but the protests subsided in time.

Separately, site manager Martin L Jones confirmed that Newmont was exploring for gold in the area and that it would take approximately six months for the company to assess whether the area had a large gold deposit.

He said initial exploration had unearthed signs that there was gold in the area.

According to Martin, the joint-venture company had been permitted to explore for gold in four North Sumatran provinces, but it had so far focused only on South Tapanuli.

South Tapanuli lies on a volcanic belt, which indicated a good possibility of finding gold deposits in the area, he said.

Martin said Newmont had spent US$25 million as of this month on gold exploration and that it would spend an additional US$9 million until December.

The company projects that it will be able to determine by year end the presence of a rich gold deposit, which would help boost the North Sumatran economy.