KEM's gold output drops by 700 kg due to road blockade
Tuesday, May 23 2000 - 03:00 AM WIB
Gold mining giant in East Kalimantan, PT Kelian Equatorial Mining (KEM) has suffered a drop in its gold production by around 700 kilograms after the company had to close its operation for 20 days due to the road blockade made by the local villagers.
President of Australian based Rio Tinto mining group Noke Kiroyan said on Monday that the company had to shut down its operation because the road blockade had caused the company to be unable to deliver basic supplies particularly fuel and camphor, the two most essential products for the gold mining operation.
Noke said that until now the company was still unable to resume operation. He was speaking at a joint press conference with the Indonesian Environmental Forum or popularly called Walhi.
Rio Tinto owns 90 percent of KEM, which has an average production output of 13-14 tons per year.
But Noke admitted that the villagers had already recently allowed a certain amount of the basic supplies to pass by, although this was not enough to restart operation.
The villagers in the West Kutai regency has made the road blockade since April 18 in a protest demanding the company to pay compensation for their land acquired by KEM.
Noke was confident that KEM would full resume its operation soon as negotiation with the local villagers over the land dispute were progressing well. He expected to reach an agreement soon.
He explained that talks with locals were being suspended last year due to changes at KEM's management and the split process of the Kutai regency into three new regencies.
"This stirred frustration among the villagers that in the end has led to this road blockade," he said.
KEM now operates in the West Kutai regency. The local administration has played a facilitator role in the negotiation with the protesting villagers, Noke said.
He said that the local administration had formed team to validate the 6,000 claims made by the locals over land now controlled by KEM.
He said that the team had completed its assessment, and added that not all of the claims were true.
He declined to say how much KEM would pay for the land compensation. KEM had paid around Rp 10 million (US$1 = Rp 8,400) in 1990. (*)