KEM allocates US$45m for mining closure

Gold mining company PT Kelian Equatorial Mining (KEM) allocates around US$45 million to finance the rehabilitation of its ex-mining sites in West Kutai, East Kalimantan, once the company ends the mining operation.

KEM?s general manager for operation Jan Anderson said, however, that the fund allocation was not a final figure yet as the company was still talking with Jakarta and the local administration to design a complete mining closure program.

?The (mining) contract of work does not stipulates the measures that must be taken by the company. That?s why we are still discussing it with the central government and local administration,? Anderson said.

He said that had not problem with securing the needed funds for the mining closure because the company had started making the allocation since its started operation. He added that KEM?s majority shareholder, Rio Tinto (90 percent), would also provide additional funding if necessary.

Anderson said that a special team led by West Kutai Regent Rama A. Asia, and KEM president Charlie Lenegan would design a comprehensive mining closure program. The members of the special team would include non-governmental organizations, local community leaders and local and central government officials.

KEM, which started commercial production in 1992, will end its mining operation in 2004 as the gold reserves in the area was no longer economical. The company?s average gold production level since 1992 has reached 12 tons of gold and 10 tons of silver.

Meanwhile, KEM external relations manager Kasan Mulyono said that the company had suffered losses since 2000 due to the fall in gold prices to an average of US$256 per ounce. But the company expected losses to be minimum this year with a rise in production.(arri)