Four gold mines to be closed down by 2004

Indonesia will lose at least four gold mines until 2004 due to reserve depletion. However, despite the country?s potential gold resource, no replacement seems to be in sight at least until the next five years.

Australia?s Aurora Gold subsidiary PT Indo Muro Kencana (IMK) will close down its Central Kalimantan gold mine this quarter due to resource depletion.

IMK is still conducting further exploration in its contract of work area. However, a company official said, even if the gold mine operator made a significant finding, the mine closure could not be avoided.

Newmont?s North Sulawesi gold mine, PT Newmont Minahasa Raya, had already stopped mining exploration last year and the current operation is only limited to the processing of gold ore stock, which is expected to continue until it closes down its whole operation by the end of 2003.

Rio Tinto?s Kelian Equatorial Mining in East Kalimantan is also set to be closed down in 2004.

Like three mine operators, Newcrest also plans to close down its Nusa Halmahera Mineral in North Maluku in 2004 also due to reserve depletion. However, sources said that further exploration had indicated additional resources that might extend the mine?s life.

Newcrest is still struggling to get clearance from the ministry of forestry to exploit the new resource as its location overlaps with protected forest, where open pit mining is banned.

The combined average production of the four mining firms is 1.1 million troy ounces per annum.

The closure would leave only three gold producing mines, Freeport Indonesia in Irian Jaya, Newmont?s Newmont Nusa Tenggara in West Nusa Tenggara and Aneka Tambang?s Pongkor mine in West Java.

Meanwhile, one of Aurora Gold?s prospective gold mining projects in Toka Tindung North Sulawesi has been on limbo because the contract of work area is occupied by thousands of illegal miners, while the local government seems to have done nothing to prevent them.

Aurora has tried to sell the asset, but thus far, no company has expressed interest to acquire it.

There are three mining projects which could replace the lost production from the closure of the four gold mines, an industry source told Petromindo.com.

They include the North Sumatra resources recently discovered by Australia?s largest gold producer Normandy mining, which is said to be most spectacular gold fining last year.

The other two are Newcrest?s gold project in Central Sulawesi but its exploitation is still hampered by forestry problem, and Aneka Tambang?s Cibaliung gold project in West Java.

However, said the source, even if those projects were proven to be economically feasible, there would still be a time gap to replace the lost gold production as none of the projects could be brought into production within the next five years. (Alex)