Newmont to close Minahasa gold mine

JAKARTA (JP): PT Newmont Minahasa Raya (NMR) plans to close its gold mine in Ratatotok, Minahasa regency, North Sulawesi, in 2003, or 13 years earlier than initially planned, because of the depletion of gold deposits, a company executive said on Thursday.

NMR spokesman Tri Harjono said in Manado on Thursday the company, which has a license to operate the mine until 2016, would close the mine because most of the available gold deposits were no longer viable for a long-term operation.

"The mine closure will leave 375 workers unemployed, but NMR has prepared a total US$4.45 million to compensate them," he was quoted as saying by Antara.

The compensation will be based on international standards and the payments will begin at the end of this year, Tri said.

He said another NMR gold mine in Lobongan, which is located near the Ratatotok mine, still had large gold deposits, but due to numerous problems, such as illegal mining by locals, the company also decided to close this mine in 2003.

Although the company has operated in the area for several years, it has yet to reach the break-even point.

"But we hope we can realize a profit of about $413 million this year," Tri said, adding that NMR, a subsidiary of the Colorado-based Newmont Corporation, had spent $234 million constructing the infrastructure at the Minahasa mine.

Newmont started production at the Minahasa site in 1996.

Besides the Minahasa site, Newmont also operates a massive copper and gold mine in Batu Hijau, Sumbawa, West Nusa Tenggara.

The Batu Hijau mine, which started production in late 1999, is owned by Newmont in partnership with Japanese firm Sumitomo Corporation and an Indonesian partner. (05)