Newmont to stay in Indonesia despite arrests (October 11, 2004)

Although five executives of a wholly owned subsidiary of Newmont Mining (NEM-N) were recently arrested in Jakarta over allegations of pollution, the company plans to continue operating in Indonesia.

“We intend to be a long-term player in Indonesia,” says Newmont spokesman Douglas Hock. “We’ve got good projects there.”

The statement comes days after Newmont President Pierre Lassonde told the National Post that his company would have to “take a step back and ask ourselves what we want to do,” in reference to a possible US$500-million investment in Indonesia over the next six months. Newmont, through its subsidiary P.T. Newmont, could forego further investment.

However, while operations have wrapped up at Minahasa, the gold mine on Sulawesi Island where the detained executives worked, it is business as usual at the Batu Hijau copper-gold mine, most of which is owned by Newmont.

At the end of 2003, Batu Hijau had a reserve of 1 billion tons containing 0.525% copper and 0.37 gram gold per ton. At the current production rate, the mine is expected to last through to 2025.

Indonesian police detained the executives over allegations that the Minahasa mine had polluted a nearby bay, causing sickness among residents. Police are investigating.

Newmont denies the charge but admits that independent studies indicate that small amounts of arsenic and mercury exist in the water, but at levels “within the standards protective of human health and the environment.”

The executives are being held at police headquarters in Jakarta. “We have been using all diplomatic and legal channels available to us to try to have these gentlemen released,” Hock says.

Newmont even contacted Ralph Boyce, the U.S. ambassador in Indonesia, who later released a statement in defense of the captives.

“We respect the independence of Indonesia’s judicial system but feel very strongly that the detention of P.T. Newmont employees is inappropriate,” said Boyce. “Throughout the investigation, P.T. Newmont has fully co-operated and made their staff available to the Indonesian authorities. P.T. Newmont has guaranteed their continued co-operation. There is no need to physically detain officials of the company. The detention of Newmont employees under these circumstances can only harm the investment climate in Indonesia.”

Under Indonesian law, a person can be detained for as long as 20 days without being charged. Four of the executives were arrested on Sept. 23; the fifth, a day later.

One of the detainees is American, site manager William Long; another is Australian, maintenance and production manager Philip Turner. The others are Indonesian: David Sompie, external relations manager; Jerry Kojansow, environmental superintendent; and Putra Wijayantri, superintendent of waste processing.

Newmont’s Minahasa operated from 1996 to 2001, though stockpiled ore continued to be processed until recently. Reclamation work is under way.