S. Kalimantan governor suspends Gem Diamonds? Cempaka mine
Thursday, April 10 2008 - 01:50 AM WIB
The governor made the decision despite a proposal from the Directorate General of Mineral, Coal and Geothermal Resources that the company be given one more year to improve its performance.
The governor said in Banjarbaru on Wednesday that the company has not complied with environmental rules, including waste treatment.
?The South Kalimantan provincial government has decided to suspend (the firm's operation) to prevent further damage on the environment,? he said.
?Administratively, the company has not undertaken environmental impact analysis in connection with its plan to expand mining area around 5,000 hectares. Technically, waste treatment did not comply with the governor regulation regarding the quality standard of environment, mainly the quality of water,? head of the province's Environmental Impact Controlling Board Rakhmadi Kurdi said.
Galuh Cempaka is indirectly owned by London Stock Exchange-listed diamond miner Gem Diamonds Limited. Gem Diamonds completed the acquisition of BDI Mining Corp (BDI Mining) in June 2007 at a net cost of US$80 million. BDI Mining owns 80 percent of PT Galuh Cempaka, which holds the mining rights to the Cempaka alluvial diamond mine. The remaining 20 percent is held by state miner PT Aneka Tambang.
The alluvial deposits at the Cempaka Mine consist of the Danau Seran and Cempaka paleochannels. The former was mined since the commencement of the operations in 2004 and is almost depleted. It was significantly smaller but of a higher grade than the Cempaka channel.
Mining in the Cempaka channel commenced in the fourth quarter of 2006 and was the main source of gravel in 2007. Diamond production increased from 8 441 cts in the first half of 2007 to 14 594 cts in the second half of 2007 due to the higher volume of gravel treated offset by the lower grade of the Cempaka channel. (*)