Aurora Gold asks govt to act against illegal miners in North Sulawesi

Australian gold mining company Aurora Gold has suspended its gold projects in North Sulawesi due to the troubles caused by illegal miners, deploring the local government's apparent lack of interest in solving the illegal mining problem.

Aurora Gold Indonesia's chief operating officer Joe Ariti told Petromindo.Com in an interview on Friday that the company would not continue its gold projects in the province unless the local government took concrete actions to stop illegal mining activities at its contract areas, especially in the Talawaan area, where it had found a high-grade gold reserve.

"Unless the illegal mining problem in Talawaan is resolved, we shall not proceed with our mining projects in North Sulawesi," Ariti said.

Aurora controls two contract areas in North Sulawesi through its subsidiaries PT Meares Soputan Mining and PT Tambang Tondano Nusajaya.

Meares Soputan, which received its contract of work from the government in 1986, has found gold reserves among others in the Toka Tindung area and is now in the development stage.

Tambang Tondano, which was awarded with a contract of work in 1997 for the development of gold resources around Meares Soputan's contract area, has found among others gold reserves in the Talawaan area.

Ariti, who is accompanied by company government liaison manager Hidayat Soenarto, said the Ministry of Mines and Energy had permitted both subsidiaries to suspend activities for one year from November last year.

He said illegal miners, who are mostly outsiders, started making inroads into Talawaan last year and their number dramatically surged in the beginning of the year.

"There are about 5,000 illegal miners now in Talawaan," he said.

He said illegal miners were also active in other parts of its contract areas, but the company was especially concerned with the situation in Talawaan given the rich gold content of the area's reserve.

The Talawaan reserve has a gold grade of between six to seven grams per ton, compared to the other reserves, including the Toka Tindung reserve, which have a gold grade of four grams per ton.

Both Aurora's subsidiaries have invested a total of US$40 million since 1994, including $12 million for exploration in Talawaan.

Ariti said the illegal miners had caused massive pollution with mercury waste in the area, threatening the health of the locals.

Studies by Australian environmental experts hired by Aurora revealed that the level of mercury waste disposed of by the illegal miners to the Talawaan River is 70 times the recommended international limit for safe drinking water.

The Talawaan River drains the mercury waste away to the Manado Bay, where the Bunaken island, an international tourist spot, is located.

Ariti said the local community has started experiencing the impacts of the mercury waste as the recent death of a stillborn baby in the area is ascribed to the mercury waste.

Having realized the impacts of the mercury waste, many locals have rejected to buy agricultural produce from Talawaan, Ariti added.

He said Aurora had long asked the local government to stop the illegal mining activities, but to no avail.

Sources said many governmental officials and police and military have been involved in the illegal mining activities as backers. A wife of a police colonel reportedly owns one of the companies engaged in the illegal mining business.

To make the situation worse, many banks in the provincial capital of Manado provide loans to the illegal miners, Ariti said.

"The thing that's most disappointing to me is ? not a word has been said (of this situation) by non-governmental organizations like Walhi (the Indonesian Forum for Environment) and Jatam (Mining Network)," Ariti said.

Both Walhi and Jatam have often criticized foreign mining investors for causing environmental destruction.

Ariti said until recently, Auroa had also had problems with illegal mining activities at its gold mine in the Mount Muro in Central Kalimantan, but the problem has been over thanks to the strong commitment of the local government to protecting the interest of mining investors.

The operation of its gold subsidiary PT Indo Muro Kencana has been back to normal since June this year.

Ariti said different from Central Kalimantan, where mining and forestry are the main industry, mining ranked low in North Sulawesi's list of industries.

"This might be the reason why the North Sulawesi is not interested in settling the illegal mining problem," Ariti said.

Ariti demanded however the central government pushes the provincial government to solve the problem. (--Alex Ginting and Hans Bodega--)