Newmont's gold mine suspends its operation

Newmont's gold mine suspends its operation

JAKARTA (JP): Gold mining company PT Newmont Nusa Tenggara,
controlled by U.S.-based Newmont Mining Corp., said it had
suspended operations at its gold mine on Sumbawa island while it
waited for a government permit.

Company president director Erik Hamer told AFP, in the West
Nusa Tenggara provincial capital of Mataram, that his company was
waiting for a permit to resume operations.

"If the permit is not issued soon, it will adversely affect
this two-billion dollar project," Hamer said, adding that Newmont
had been waiting for the permit for about six months.

He confirmed that the gold mine, said to have 14.7 million
ounces in gold reserves, had been idle for about a week.

Newmont has a 45 percent share of the Batu Hijau gold mine in
Sumbawa, West Nusa Tenggara, with Japan's Sumitomo controlling 35
percent and Indonesian company PT Pukuafu Indah, owned by
businessman Jusuf Merukh, holding the remaining 20 percent.

Local papers reported last week that Newmont had asked the
Indonesian government for construction permits but the government
refused to give them until the company was ready to give greater
shares to the Indonesian firms.

Director General for General Mining Adjat Sudradjat had
confirmed that the government had asked Newmont to sell 45
percent of its shares to local companies, up from the current 20
percent.

The request to Newmont had been approved by the Minister of
Mines and Energy I.B. Sudjana, he said.

Adjat said the proposal was made because the Indonesian people
wanted a greater share in the country's mining projects and many
Indonesian firms were capable of exploring and developing mineral
deposits.

Several analysts said they regretted the government decision,
calling on the government to adhere to the contract of work it
gave the company.

They said the decision would taint the image of Indonesia in
the mining world.

Merukh, who was speaking to reporters on the Busang affair
yesterday, refused to comment. "Don't talk about that (Batu
Hijau) at this time ... it is not the right time to talk about
it," Merukh said.

Tycoon Muhammad (Bob) Hasan, who was involved in the Busang
gold mine and before later withdrawing from the project, said he
did not believe the government required Newmont to sell its
shares.

"Nobody would invest if you did that," Bob Hasan said. (jsk)