Press Release: Demonstration over compensation at KEM ends

Kutai Barat, September 17, 2004 ? In response to a demonstration staged by community members demanding the settlement of compensation issues in front of the office of Bupati Kutai Barat in Sendawar, PT Kelian Equatorial Mining (KEM) and the related parties held a meeting on Wednesday, 15 September 2004, at the Serbaguna Hall of the office of Bupati Kutai Barat, Sendawar. KEM, Pemkab Kutai Barat, Muspida Kutai Barat, DPRD Kutai Barat and the claimants agreed on the following.

First, KEM will as soon as possible make payments to entitled 5026 Category claimants who are entitled before KEM?s mine closure in 2005. The payments will be processed and made from 21 September 2004 to 1 February 2005. Payments to claimants who were present at the meeting will be prioritized.

Second, for 5026 Category claimants (Long Iram Agreement), payments will be made to those entitled to compensation for ?loss of livelihood?, including Rp 17 million, in accordance with the previous agreements.

Third, for payment purposes, the community are expected to submit administrative matters so that KEM can make immediate payments.

Fourth, in case of a problem related to the compensation process, the community will refer the settlement to the Compensation Team of Pemkab Kutai Barat by involving the representative of claimants under the supervision of DPRD Kutai Barat.

Fifth, information about payment, including time and venue of payment, will be directly given by KEM through written notices at KEM?s information offices.

KEM operates a gold mine in Kelian, Kutai Barat, East Kalimantan and will cease its operations in February 2005, which will be followed with final landform works until 2008 and long term monitoring until 2012. KEM is now employing approximately 400 permanent employees and 900 contractors, most of them recruited locally. (end of release)

For further information, please contact:
Ali Ahmid, Manager Employee and Community Relations
Phone: +(62-542) 765 861, ext. 504
Fax: +(62-542) 761 818
Email: ali.ahmid@ptkem.co.id
Website:www.keliangold.com