Newmont optimistic about settling Indonesia mine lawsuit

The world's largest gold producer, Newmont, is optimistic about settling a $133.6 million lawsuit over alleged pollution at an Indonesian mine, saying Thursday it hopes to wrap up discussions with the government ahead of a scheduled trial next month.

Indonesia alleges that Newmont Mining Corp.'s local unit, Newmont Minahasa Raya, violated environmental laws by dumping millions of tons of mercury and arsenic-laced pollutants into Buyat Bay on Sulawesi island, allegedly causing villagers to develop skin diseases and other illnesses.

The company said it has held several meetings with Indonesia's government over the civil lawsuit it filed and hopes to forge an agreement before Oct. 13 when the company is scheduled to present evidence on why the case should be dismissed.

"We're optimistic," Robert Gallagher, Newmont's vice president of Indonesia operations, was quoted by the Associated Press as saying. "We're doing everything in our power to cooperate with the government to resolve this as quickly as possible."

Gallagher refused to provide details of the discussions or what an out-of-court settlement might look like.

The company in the past has said that it wouldn't acknowledge any wrongdoing in a settlement but may consider providing money for community development programs around the Buyat Bay mine.

Meanwhile, the company is scheduled to be back in court Tuesday for a criminal trial over the same pollution allegations. A judge is expected to rule on Newmont's request that charges against its unit and the company director, Richard Ness of Ada, Minnesota, be dropped.

If convicted, Ness would face up to 10 years in jail and a fine of $68,000.

Newmont has told a court that the police investigation and the indictment are flawed, adding that there was no evidence that villagers were suffering from heavy metal poisoning or that fish stocks had dropped.

The criminal trial, which opened last month on Sulawesi Island, is being closely watched by business leaders who say a guilty verdict could set back Indonesia's improving foreign investment climate.

Environmentalists, meanwhile, are eager to see if the cash-strapped government will take the rare step of cracking down on a multinational company accused of pollution. (*)