PRESS RELEASE - Newmont asks govt to solve land dispute

Following the blocking of the company's ore crusher by a group of ex-landowners, PT Newmont Minahasa Raya (PT NMR) today asked the Governments of Minahasa regency and Northern Sulawesi as well as the National Government to take action to help the company. The group, numbering around 12 people forced the third operational shutdown of the mine in less than four months. With ore feed for the crusher running low, the company was forced to shut down the feed into the processing plant, thus closing down the operation.

"We've tried very hard to facilitate discussions on this (land) issue, provide for neutral arbitrators to review all aspects of the land cases and to seek alternative dispute resolutions, but the Group of Five has rejected every offer we've made," said Paul Lahti, PT NMR's General Manager. The Group of Five refers to the ex-landowners that have been pressing their claim for more money for land they sold to the company in the early 1990's.

"Once again, we're faced with a situation where a dozen people are holding the company and the community hostage to their illegitimate demands for additional money," noted Lahti. "If these people feel they were wronged, why don't they want a neutral arbitrator to examine the case? If Newmont did something improper, or the prices paid were unfair, why are there only five ex-landowners protesting out of the total of 400 people whose land we bought?," asked Lahti.

The company is now looking to the Government of North Sulawesi and the Police to solve the problem, according to Lahti. "The government cannot allow incidents like this to continue across the country. A handful of people are breaking the law and the Police need to enforce the laws of this nation for investors to have any confidence in Northern Sulawesi or Indonesia."

While the company has been forced to temporarily suspend its operations at the Mesel mine site, Newmont still hopes that the situation can be resolved peacefully. However, the protestors are in violation of the law, have made verbal threats against company officials, and thus should face penalties for their behavior, Lahti commented.

The Group of Five protestors claim that they deserve more money for land purchase in the early 1990's by the company. Out of nearly 400 cases, only the Group of Five are making claims against the company for additional payments.

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Newmont Minahasa Raya, a unit of Denver-based Newmont Mining Corp, has been forced to halt operations several times this year because of protests from locals and a tax dispute with the Minahasa regional government.

In July, Newmont was forced to evacuate women, children and non-essential staff from the mine and halted operations after alleged intimidation by protesting locals.

Mining companies have increasingly found themselves at odds with local residents, especially over land compensation, since the authoritarian rule of former president Suharto came to an end in 1998.

Newmont's mine in Sulawesi faced problems earlier this year when a tax row with regional authorities threatened to close the mine. A compromise was eventually found after Newmont agreed to pay $3 million for tax and community services.

Officials have said Newmont Minahasa Raya's gold output in 1999 was 11 tonnes and targeted to reach 12 tonnes this year. (*)