Newmont will close down gold mining operation in North Sulawesi

PT Newmont Minahasa Raya, a subsidiary of the United States-based Newmont Corporation, will soon close down its mining operation in Minahasa regency, North Sulawesi ahead of its contract, which will end in 2003, Manado Pos reported on Friday.

Sources said that the mining operator had formally notified local authorities and the Ministry of Energy and Mineral Resources about its intention to shut down its mining operation in the regency.

Tri Hardjono, a spokesman for the company, confirmed Newmont's plan to withdraw from its mining operation. He said that the company had sent an application letter to several related government agencies to allow it to end its operation ahead of the contract, which would end in 2003.

He said that the company had decided to shut down the operation because the existing gold deposits were no longer economically viable. "The withdrawal document should become a reference for related government agencies to close down the mining operation," he was quoted as saying by the daily.

Jerry Parulima, the head of the legal department at the regent's office, said that Newmont's application to withdraw from its mining activities was in line with the existing regulation.

All mining companies intending to close their operation should, under the regulation, submitted their withdrawal plan to related government agencies before their contract ended, he said.

"The company does apply for the extension of its contract, I think because the company feels the gold deposits are no longer economically viable," he said.

But sources said that the decision to end the contract ahead of the initial schedule was made because Newmont could no longer bear the people's resentment against its operation especially from environment activists and local government.

Recently, the environmental organization Walhi demanded the government to close down Newmont's gold mining operation for its failure to protect the environment.

Walhi accused the gold mining company's undersea tailing ground had not only damaged the environment but also threatened the lives of the people living near the dumping site.

In late 1999, the mining company and the local government had been engaged in a fierce legal fight after the company refused to pay taxes for the overburden of its mining activities. The court then ordered the closure of its mining operation in favor of the local government. But the Supreme Court revoked the order allowing the company to continue its operation.

Newmont Minahasa, which started its commercial operation in 1996, produced between 500 kilograms to 800 kilograms a month. The peal production was made last year.

The Denver-based Newmont Corporation also operates massive copper and gold mining in Sumbawa, West Nusa Tenggara. (*)