Tue, 18 Apr 2000

PT Newmont operates Minahasa gold mine as usual

JAKARTA (JP): Activity at PT Newmont Minahasa Raya's gold mine in Minahasa, North Sulawesi, continued as usual on Monday as the deadline set by the local court to close down the mine passed without incident.

Company spokeswoman Yonaniko Salim said Newmont continued to operate its mine because it had not received any new information from the local court regarding the closure order

"As we received no directions from the Tondano court, we then acted on the Supreme Court's order," Yonaniko said.

The Tondano District Court issued a provisional ruling on April 8 ordering Newmont to close down its mine by last Sunday, awaiting a final verdict on the company's tax dispute with the local government.

But the Supreme Court intervened and asked the local court to delay the closure of the Newmont gold mine.

Yonaniko said during the last court hearing on Saturday, neither the district court or the regency mentioned the closure order.

"The topic just never came up," she said.

She did say that the hearing on the tax dispute was nearing its end, as the court requested Newmont and the regency to prepare their final conclusions. She said the summations would be presented at the next hearing on Saturday.

She said the court would issue its verdict after considering these summations, adding that she could not say when the verdict would be delivered.

The regency sued Newmont for a total of Rp 62 billion (US$8.2 million) in overdue taxes and compensation.

Under a 1998 local tax regulation, mining companies are obliged to pay taxes on gravel, sand and stone extracted for commercial use.

The regency believes Newmont used its extracted overburden for commercial purposes, and thus owned taxes on the overburden.

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

The district court's closure order was issued after a joint verification team, comprising officials from the local administration, the Ministry of Mines and Energy and Newmont representatives, failed to reach an out-of-court settlement.

According to media reports, the regency is also preparing to charge Newmont with causing environmental destruction.

Several non-governmental organizations have accused Newmont of burying environmental audit results which show that the company's operations have harmed the environment.

Chalid Muhammad, coordinator for the Mining Advocacy Network (JATAM) said that a joint team formed by the local administration conducted an environmental audit on Newmont last year.

The audit, he said, revealed that Newmont's tailing disposal system had caused toxic elements to reach an intolerable level at the disposal site in Buyat Bay.

The director general for general mining, Surna Tjahja Djajadiningrat, however said the first audit results found no toxic elements in Newmont's operation.

"Newmont doesn't even use mercury in its operation, only old mining companies still use that," Surna said.

However, he admitted that the company had some technical problems with its tailing system, which caused muddiness in the surrounding water of Buyat Bay.

Surna said he had asked Newmont to fix the problem. (bkm)