From: Jerry Norton, Reuters
Published December 2, 2004 12:00 AM

Newmont Positive on Indonesia Despite Legal Case

JAKARTA − Newmont Mining Corp. (NEM.N) is positive about its Indonesia operations despite allegations of pollution that could bring legal charges against executives and a company unit, a Newmont vice president said on Thursday.


Environmental groups and some villagers living near Buyat Bay on Indonesia's Sulawesi island say waste disposed in the bay by the Newmont gold mine contained pollutants contaminating the food chain and causing health problems.


Newmont, the world's biggest gold producer, denies that.


However, Indonesian prosecutors said this week they expect to file charges under environmental laws against six executives and the company's Indonesian unit responsible for the mine.


Conviction could mean jail terms for the executives.


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Asked how that situation affected Newmont's attitude towards Indonesian operations, vice president for environment Dave Baker said: "Newmont's still very positive on Indonesia.


"We've been here a long time and as far as I know we have no intention of leaving ... It doesn't matter what country you're in, you go through ups and downs," the Denver-based executive told reporters near the end of a visit to Indonesia.


Mining groups and the U.S. embassy in Jakarta have said the Newmont case may discourage much-needed foreign investment.


Asked if he thought the prospect of executives going to jail would rule out consideration of major new projects in Indonesia, Baker said that wouldn't necessarily be the case.


"It just depends on the project and the project's economics and a whole lot of factors," he said. "There's always the political piece, the technical piece, the social piece, the economic piece."


Newmont's chief executive, Wayne Murdy, is also in Indonesia this week and visiting government officials, including the mines and energy minister, to present the company's side on the issues.


Charges of breaching environmental rules carry jail terms of up to 15 years in Indonesia if people are proved to have died or become seriously ill as a result of pollution. Legal articles cited by prosecutors this week carry terms of up to 10 years.


Baker said studies of illnesses in the Buyat Bay area, site of Newmont's Minahasa mine some 2,200 km (1,400 miles) northeast of Jakarta, showed no signs of arsenic or heavy metal intoxication. He suggested the health problems were "fairly typical of that part of Sulawesi."


He said while Newmont did not dispute many of the facts in a recent government-commissioned report that cited significant levels of mercury and arsenic in bay sediment, the issue is "applying appropriate and correct science to the facts."


If that was done, the conclusion would be that water quality in the bay was fine and the sediments did not pose a threat to health, he said.


A number of agencies and groups have been involved in several studies of the environmental situation in the area and have reached varying conclusions.


Some analysts, citing the detention of five Newmont executives for several weeks during a police investigation, say regardless of the merits of the case Indonesia is treating Newmont more harshly than its own companies when faced with similar allegations.


Environmentalists respond that the government has been too lenient in the past and should be more vigorous.


Source: Reuters


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