Sumitomo in mine deal

Sumitomo in mine deal

TOKYO (Reuter): Japan's Sumitomo Corp said yesterday that it and Newmont Mining Corp of the United States had signed an agreement to develop the Batu Hijau copper/gold deposit in Indonesia.

In March, Sumitomo and Newmont announced they had signed an agreement in principle to develop, finance and operate the Batu Hijau deposit, which has estimated resources of 11.2 billion pounds of copper and 14.7 million ounces of gold.

"The two companies officially signed an agreement on the copper/gold project today," Sumitomo said in a statement.

Newmont is to own a 45 percent stake in the project and Sumitomo 35 percent, while an Indonesian partner will hold the remaining 20 percent.

The project's cost is estimated at more than $1.5 billion, the Japanese trading house said.

"Copper consumption in Asia is growing at around eight percent per year, and the high growth is likely to remain," Sumitomo said in the statement.

"The Batu Hijau copper/gold deposit project in Indonesia is expected to be a key center of copper supply in this region," the trading house said.