OZ Minerals suspends N. Sumatra gold project

Australia?s third largest mining firm OZ Minerals said on Tuesday it would suspend development of Martabe gold project in North Sumatra and capital expenditure of approximately US$225 million would be suspended until after 2009.

Martabe is part of the several projects the company suspended to face the worsening global market condition. The company also makes substantial cuts to operating cost budgets.

?OZ Minerals will complete a number of engineering aspects of the Martabe gold-silver project in Indonesia and will also take delivery of a number of long lead-time items of capital equipment. It is estimated that the current phase of the project will be completed during the second quarter of 2009. From that point, the project will be deferred, as will capital expenditure of US$225 million.?

?We continue to regard Martabe as a valuable project, and we remain committed to building a diversified mining business in Indonesia?, said Andrew Michelmore, Managing Director and CEO of OZ Minerals. ?However, lower commodity prices combined with the conditions in the financial markets means we must take this decision?.

Oz?s initial plan is to start Martabe production late 2009 with annual output of 200,000 oz of gold and 2 million oz of silver. Estimated capital cost to develop the project is US$310 million. (alex)