Newmont sues five insurance firms over Indonesian mine claim

Newmont Mining has sued five of its insurance companies, alleging the firms failed to pay on Newmont claims for damage at an Indonesian gold mine, the Denver Post reported.

In a suit filed last week in Denver District Court, Newmont claims that London-based Royal & Sun Alliance Insurance (Global) Ltd. and four of its risk-sharing firms refused to pay at least US$2.3 million in claims.

The suit charges the firms with bad faith, breach of settlement and breach of contract.

According to the legal filing, in 1999 Newmont suffered two episodes of damage to a subsea pipeline designed to dump mine tailings from the Batu Hijau gold and copper mine onto the seabed off the coast of Indonesia's Sumbawa Island.

The suit alleges that the insurance group failed to pay for repairs that should have been covered under the policy, and also failed to pay for the costs of a remote-operated submarine designed to check on repairs.

In addition to $2.3 million in actual damages, Newmont seeks an unspecified amount in punitive damages.

Newmont spokesman Stephen Gottesfeld said all of the tailings that leaked from the pipeline were recovered and removed.(*)