Meares Soputan to start production in October

PT Meares Soputan Mining (MSM), a subsidiary of London Stock Exchange-listed mining firm Archipelago Resources will soon start production in its gold mining worth US$140 million in Toka Tindung project, North Sulawesi, in October 2007, Bisnis Indonesia reported Monday.

MSM's general manager Peter Brown said that the construction of mining infrastructure is expected to completed this month with a total investment of US$80 million.

"Our capital expenditure for 2007 reaches US$60 million and the project will soon start operation in October of this year with processing capacity of 1.4 million tons of gold ores and will be raised to 1.7 million in 2008," he said over the weekend.

Peter said that the state is expected to generate revenue between US$250 million and US$300 million from the taxes paid by the company. The state will also get other benefits such as the empowerment of local economy.

Peter gave assurance that the company's operation would not cause environmental pollution given that the mine was located close to the resident's residential areas. "We will carefully control the environmental impact of the company's operation on the community because the mining is located in the center of the public residential area.

The Toka Tindung gold project has a resource of 1.75 million ounces (ozs) of gold equivalent, of which at least 900,000 ozs will initially be mineable by open pit. The project is targeted to produce 160,000 ozs per annum for an initial 6 year mine life.

Earlier, MSM planned to commence the production in mid 2006.

However, the North Sulawesi provincial administration has opposed the operation of MSM's Toka Tindung gold mine in the province's Minahasa regency on fears that the company's mining activities would damage the environment.

In Feb 2007, North Sulawesi Governor Sinyo Harry Sarundajang said that his office had formally sent a letter to the State Minister of Environment to convey the local government's decision to reject the environmental impact analysts (AMDAL).

Sarundajang said that the AMDAL documents which had won approval from the Jakarta environmental authority were not significant enough to protect the environment around the company's mining site which is located near the Likupang marine conservation area and the protected Tangkoko forest area. (*)