Newcrest starts to lose patience on C. Sulawesi gold project
Saturday, September 8 2001 - 10:08 AM WIB
?We might not be able to proceed with the project if don?t get the permission from ministry of forestry by Christmas,? Tim Richards, regional exploration manager for Newcrest Mining Group Indonesia told Petromindo.Com on a side line of an interdepartmental meeting to discuss Newcrest?s gold project and BHP Billiton?s Gag Island nickel project.
PT Citra Palu Minerals, the operator of the project, is 90 percent owned by Anglo-Australian mining giant Rio Tinto. Another 10 percent owned by local firm PT Arlia Karyamaska.
In March 2001, Newcrest agreed to acquire the entire shares of CPM on condition that it is allowed to explore some 500 hectares of land which was now located in Poboya forest park.
CPM was granted sixth generation Contract of Work (CoW) in 1997, which entitle the company to explore for gold in Central Sulawesi. However, in 1999, minister of forestry granted forest park status to a plot of land located in CPM?s exploration area. The park is now known as Poboya Forest Park, located in Palu, the province?s capital.
CPM had spent in excess of US$ 7 million for the project.
?What we need now is to be able to take some 500 hectares of land that is now located inside the park as we believe a substantial amount of gold reserve is located within the boundary of the park,? said Richards.
Richards said that Newcrest had already bagged support from various parties to proceed with the project, including major of Palu, Palu?s legislative council, governor of Central Sulawesi, minister of Eastern Indonesia development acceleration and minister of energy and mineral resources.
?Even a team from ministry of forestry had given positive recommendation on the request to alter the forest park boundary,? said Richards.
However, the then Minister of Forestry Marzuki Usman on his letter dated May 22, 2001, refused to change the forest park boundary, forcing CPM to extend exploration suspension.
?We can?t go on with the acquisition if the (current) Minister of Forestry (M. Prakosa) do not revoke the letter and grant permission,? said Richards.
?The reason why we haven?t pull out now is because we have strong encouragement from the local authorities and the governor of Central Sulawesi,? he said.
He further said that there were other interesting places to invest money in mining exploration outside Indonesia.
?We have now commitment to invest in Central sulawesi, but if we don?t get government?s commitment, ours will dry up very quickly,? he said.
According to the document distributed in the meeting, Newcrest estimated the gold mine to last up to 10 years at production rate of 150,000 troy ounces of gold per year.
Total investment for the project is estimated to be US$ 85 million.
Deputy minister of Eastern Indonesia development accerelaration Made Astawa Rai fully support Newcrest plan to develop the gold prospect.
?The project would be beneficial to the people of Palu and Central Sulawesi. We strongly urged ministry of forestry to grant permission to change the forest park boundary,? he said. (alex/godang)