G-Resources faces potential loss of Rp14.3 billion per day

By Cepi Setiadi

Hong Kong-listed gold miner company, G-Resources claimed that they are facing potential loss of Rp 14.3 billion per day following the company's policy to send hundreds of its employees home. The company said that the impediment in constructing the clean water pipelines to Batangtoru river has forced Martabe Gold Mine to send some 900 employees and contractors home, following its temporary suspension last September 19, which is also resulting in significant daily revenue and tax losses.

President Director of Martabe Gold Mine Peter Albert said, "We regret that we had no choice other than sending hundreds of our employees home. While we're still able to provide our employees with basic salary, we really need definite solutions in the next few days to enable us to recommence operations. Without completion of the pipeline installation, Martabe Gold Mine cannot operate. "Consequently there will be no revenue to pay salaries, operating costs and other expenses such as CSR programs" said Albert on its press statement today.

Martabe Gold Mine employs more than 2,700 people, of which some 70% were recruited from local residents and the surrounding areas of Batangtoru. It is the first major mining investment of this size in Indonesia for more than 10 years, with a total investment, capital expenditure and working capital reaching US$ 900M, spent mostly in Indonesia. Ongoing operating, capital and exploration expenditures will be more than US$ 200M/a, also mostly to be spent in Indonesia.

At full production, revenues from Martabe Gold Mine (before costs and before taxes, royalties etc.) would be about US$ 1.5M per day that is how much value is being destroyed at the moment. The Government will receive more than 30% of the mines profits in taxes and also receives royalties and the Provincial and Regency Government would earn dividends from owning 5% of the mine. All of this is lost and destroyed by the current actions preventing the clean water pipeline from being built.

"We strongly believe the resolution will be reached in the near future and the installation of the pipeline could soon be executed. We also believe that the government and the people of Indonesia would not easily give up such tremendous potential of social and economic development for the residents of Tapanuli Selatan, North Sumatra, and Indonesia in general from the presence of Martabe Gold Mine," said Albert.

The decision to release the clean water to Batangtoru River has gone through an intensive feasibility study and has been granted a formal permission as stipulated in the Environmental Impact Assessment document (AMDAL) approved by the Regent of South Tapanuli, March 2008. The water - which some of them was collected from the heavy pouring rain - will be processed in a custom designed and built Water Polishing Plant (WPP) and will meet the quality standards conforming to the Decision of the Minister for the Environment No. 202/2004 before being released back to the environment.

Albert added that there is misinformation being spread, relating to poisoning of waters and other issues relating to the river. It has also been suggested by some parties that the clean water discharge will pollute the environment - this is simply not true, the Indonesian government would never have approved a discharge of polluting water nor would the Company ever consider a solution which deliberately had a negative impact to the environment. "The Company is absolutely committed to best environmental and social performance and we will always operate to the highest standards for the benefits of all stakeholders? he said.

Peter said that The Company urgently requests resolute and concrete actions from various stakeholders, including the governments to help clear up the issues to avoid irresponsible parties from taking the opportunity to further disturb the situation. "In the end, the community will be the one who suffer the greatest loss".

Editing by David Mustakim