Newmont projects 50% increase in gold output

JAKARTA (JP): PT Newmont Nusa Tenggara (NNT), a subsidiary of the Denver-based Newmont Mining Corporation, expects to produce between 550 to 600 million pounds of copper and 400,000 to 450,000 ounces of gold from its Batu Hijau copper and gold mine on Sumbawa island, West Nusa Tenggara province in 2001.

The company said in a statement that the projected 2001 production represents an increase of approximately 20 percent in copper production and 50 percent in gold production over projected 2000 production of 495 million pounds of copper and 280,000 ounces of gold.

"We are continuing to successfully ramp up production at Batu Hijau and as we do so, our operating costs will decline," said Tom Enos, NNT's president.

Production costs for 2001 are targeted at 55 cents per pound of copper, after gold credits, and are expected to decline to between 45 and 50 cents by 2004. Production costs for the first nine months of 2000 were 63 cents per pound, after gold credits.

He added that senior debt, principal and interest, for 2001 amounts to 29 cents per pound and is expected to decline to approximately 22 cents per pound by 2004.

In the third quarter of 2000, the project generated equity income for the first time. Last month, it passed the lender's final completion tests so that US$1 billion in project financing is now non-recourse to the partners.

PT NNT is a partnership, 20 percent held by PT Pukuafu Indah and 80 percent by the Nusa Tenggara partnership, which is 43.75 percent owned by a consortium led by Sumitomo Corp. and 56.25 percent owned by Newmont Indonesia Ltd., a subsidiary of Newmont Mining Corporation.

Batu Hijau is the largest ever start-up of a "green fields" mining project. Located on the Indonesian island of Sumbawa, it contains reserves of 10.5 billion pounds of copper (5.7 billion equity pounds for Newmont's interest) and 11.8 million ounces of gold (6.4 million equity ounces) and has a mine life of over 20 years. (hen)