Newmont Minahasa resumes its mining operations

JAKARTA (JP): Gold mining firm Newmont Minahasa Raya in Minahasa, North Sulawesi, resumed operations early on Friday after a blockade of the company's ore crusher by protesters ended.

Company manager for government and community relations Tri Harjono said on Friday the protesting locals and former landowners agreed to leave following a meeting with the management and local authority, during which they accepted the firm's proposal to hold a discussion to review their demands.

"The protesters left our site in the wee hours on Friday. They agreed to sit down later for a one-on-one discussion to review their demands on a case-by-case basis," he told The Jakarta Post.

He said the discussion was scheduled for Monday.

He said the group, which numbered about 40 people, went to the company's ore crusher on Wednesday and blockaded the site, demanding Newmont pay additional compensation for the land they sold to the company in the early 1990s.

Tri said the company stood by its statement that it would not meet the protesters' demand for additional payment because it had already properly compensated all 400 former landowners from whom it bought the land.

"We believe that we did everything right," he said.

"However, if we really did so something wrong here, for instance an error in land measurements, we would be responsible," he added.

The land dispute is the latest in a series of problems experienced by the company.

Last year, the Minahasa regency filed a lawsuit against Newmont, demanding the company pay Rp 62 billion (US$7.5 million) in overdue taxes on building materials and insisting the local district court order the closure of the firm's operation.

Newmont refused to pay the taxes, arguing that the taxes were not included in the contract of work it signed with the Indonesian government in 1986.

The tax dispute was resolved in April through an out-of-court settlement, in which Newmont agreed to pay the regency $500,000 in overdue taxes plus some "compensations".

In June, Newmont was involved in a land dispute with locals who blockaded the company's mining site for a week, demanding additional compensation for their land.

The week-long blockade cost the company about 2,000 metric tons of lost gold production per day.

Tri said the company was relieved the ore crusher blockade was over and it could immediately recommence operations.

The company also expressed appreciation for the local authority's help in negotiating with the protesters and persuading the latter to end the blockade.

Tri said the blockade, although only lasting for three days, caused Newmont losses because it had to stop operations for a while.

He said Newmont was expected to stop its gold production in Mesel in the next two or three years because the gold deposits in the area were depleted due to fast and extensive production activities in the early years of operation.

The company is currently pondering the possibility of working on a new mining site in the nearby village of Limpoga, on which it found possible gold deposits, he said.

The company estimates both Mesel and Limpoga have a combined gold deposit of about two million ounces.

Newmont Minahasa Raya, which began its commercial operations in mid-1996 after conducting exploration projects at the Minahasa mining site from 1986 to 1988, is 80 percent owned by Denver- based Newmont Mining Corp. and 20 percent by Tanjung Sarapung, a firm owned by local businessman Yusuf Merukh.

Newmont Mining Corp. also operates a mining site in Sumbawa, West Nusa Tenggara, as well as China, the Philippines, Kazakhstan and Mexico. (cst)