Merdeka says maiden production remains on schedule

By Thomas Sembiring

IDX-listed mining firm PT Merdeka Copper Gold Tbk said it would suspend construction of hauling roads and supporting offices at the Tujuh Bukit gold mine in Banyuwangi, East Java, following recent attack by angry villagers, but maiden gold production remains on track as scheduled.

Adi Adriansyah Sjoekri said on Monday that the company will limit activities to administrative affairs until political tension subsides when local election ends December 9.

?We?ll only be operating limitedly until (the end of) December 9 local election,? Adi said.

Last week, angry villagers vandalized and set on fire facilities at the Tumpang Pintu (Tujuh Bukit) mine in Pesanggrahan, Banyuwangi, operated by Merdeka?s subsidiary PT Bumi Suksesindo (BSI), which holds permit of the mine.

Adi, however, said that despite the temporary suspension of pre-construction activities, a move advised by the local Banyuwangi administration, which is a shareholder in the company, the mine remains on schedule to begin production in the fourth quarter of 2016.

According to 2012 JORC, the mine holds ore reserves of 90 million tons in its oxide layer. The project is expected to produce 90,000 ounces of gold and 300,000 oz of silver per year from the fourth quarter of 2016 to 2025.

Elsewhere, Adi said in a statement that BSI has complied with all existing regulations including on environment in operating the Tujuh Bukit gold project.

BSI Director Cahyono Seto said that the company is committed to prioritize the recruitment of local people. ?So far, out of the total 500 people employed at BSI, as many as 500, or about 90 percent, are local Banyuwangi people,? he said.

Editing by Reiner Simanjuntak