Newcrest threatens to pull out of Indonesia: Report
Friday, November 7 2003 - 12:37 AM WIB
Newcrest CEO Tony Palmer has held high-level meetings in Jakarta to try to re-start the 250,000 ounce project, which was halted last week after the villagers invaded the site on Halmahera island.
A spokeswoman for the Maluku tribes, Eton Duan, said yesterday the group would remain until Newcrest agreed to distribute 500 billion rupiahs ($84 million) in profits from its nearby Gosowong mine with locals who claimed ancestral land rights over the area.
She said the group was also demanding that 10 per cent of the profits from the Toguraci mine, which had been scheduled to begin production next month, be spent on local community projects.
"We will not leave until the company gives us what we want," she said.
Newcrest said the protesters were illegal miners who had removed gold from the Toguraci pit since occupying it on October 24. This was denied by Duan.
A spokesman for Newcrest said yesterday that Palmer told two Indonesian cabinet ministers that Newcrest would reconsider its investments in Indonesia unless a solution to the impasse was found.
He believed only 200 people continued to occupy Toguraci after local police removed most of them.
However, Duan maintained yesterday that about 2000 people from 23 villages were still occupying 35 hectares of the site.
Reeve said the grievances were not with Newcrest but with the way the North Maluku government allocated its mining royalties.
Newcrest has a relatively small $120 million invested in Indonesia but its woes highlight again the uncertainties and risks for investors in the country.
The company was almost forced out of Gosowong in 2000 after ethnic and religious violence flared in the Maluku area, resulting in thousands of deaths.
The controversy over the Halmahera protest comes as the Indonesian government moved a step closer to allowing 22 miners, including Newcrest and BHP Billiton, to proceed with open-cut mining projects in protected forests.
The companies previously had permits to mine in the forest areas, but these were jeopardised by a 1999 forestry law banning such operations.
Indonesia's Kompas daily said yesterday the government decided to allow 13 of the 22 to proceed after advice that it could be sued for up to $US31 billion ($44 billion).
The Indonesian mining industry has virtually stalled as investors have pulled out, citing legal uncertainty and political instability.(*)