Newmont to reduce costs

Newmont to reduce costs

DENVER (Reuter): Newmont Mining Corp chief executive Ron Cambre told the annual meeting the company is studying ways to reduce capital costs to develop the Batu Hijau copper/gold deposit in Indonesia.

Newmont has an agreement in principle with Sumitomo Corp to jointly develop, finance and operate the project which will probably cost more than US$1.5 billion.

Cambre told Reuters later the company is studying whether sea water instead of more expensive fresh water could be used for the copper flotation process.

"We actually, as of this week, have a pilot plan in Australia at a research lab that's looking into the application of sea water to our process, which would conserve capital," he said.

"We could achieve (savings of) upwards towards $100 million," he said.

Cambre told shareholders construction could begin next year and production could start by 2000. "This is a project that could underpin our production and cash flow for 20 years or more," Cambre said. The project would still need final board approval.