MAC: Mines and Communities

Newmont Says Peru, Indonesia Pollution Charges Differ

Published by MAC on 2004-11-10

Newmont Says Peru, Indonesia Pollution Charges Differ

By Heather Draper of Dow Jones Newswires

November 10, 2004

Denver -- Environmental groups have scored two "wins" against Newmont Mining Corp. (NEM) in the last week, but the world's largest gold producer says the two issues are "very different" from each other.

Newmont has been hit by pollution allegations from around the globe in recent months, but the most recent headlines came out of Peru and Indonesia, where Newmont has gold and copper mining operations.

Last week, Newmont decided not to pursue a contentious mine in Peru because of earlier protests there.

This week, a government panel in Indonesia issued a report indicating that Denver-based Newmont's gold mine on the island of Sulawesi polluted the island's Buyat Bay.

Some of the panel's conclusions: Arsenic levels in Buyat Bay sediment are 100 times higher than at control sites where no mining occurred, consumption of fish from the bay poses a risk to humans, and mercury levels in seabed-dwelling organisms in the bay are about 10 times higher than at control sites.

The report this week in part contradicted an earlier report by the World Health Organization that did not find harmful levels of mercury in Buyat Bay.

Newmont spokesman Doug Hock said the company sees the issues in Peru and Indonesia as "separate and very different."

Newmont viewed the Peru protests "as legitimate concerns of the community," Hock said. "The level of concern was greater than we had originally thought."

The company decided that exploration and mining at the Cerro Quilish deposit at Newmont's huge Yanacocha mine site in Peru "couldn't be done under current conditions," he said, so Newmont asked the Peruvian government last Thursday to revoke its exploration permit for the deposit.

Environmentalists heralded the decision.

Carlos Abanto of Friends of the Earth-Peru said in a prepared statement: "Newmont's decision to give up on Quilish was due to major protests from rural and urban people of the Cajamarca region. We hope that this signal is a lesson to improve corporate behavior and help reach the point where mistakes are acknowledged and opinions are respected."

But Newmont Chief Executive Wayne Murdy has called the Indonesia allegations "blatant lies" and faults nongovernmental organizations, or NGOs, for the trouble brewing in that part of the world.

"You have some NGOs who have made wild accusations that had the unintended consequence of landing five guys in jail for a month," spokesman Hock said this week.

Five executives from Newmont's Indonesian subsidiary were thrown in a Jakarta jail from mid-September to mid-October on pollution allegations. The men were never formally charged with anything.

Indonesian police released the men, who remain on "city detention," meaning they can't leave the island of Sulawesi where they work.

Indonesian police continue to investigate the pollution charges, Hock said.

Payal Sampat, international program director of Earthworks in Washington, said it's "unfortunate" that Newmont is blaming NGOs for its problems in Indonesia.

"Regardless of what the media spin is, let's get to the bottom of what the issue is," Sampat said. "It's the responsibility of the local government, national government and Newmont to make sure the communities around Buyat Bay are being protected."

The reason Newmont is saying the pollution allegations are different in Peru and Indonesia, Sampat said, is because the Indonesian reports have implications on the company's much-larger Batu Hijau mine on the Indonesian island of Sumbawa.

The Batu Hijau mine also uses what is called "submarine tailings disposal," the controversial method used near Buyat Bay involving dumping treated mine waste into the sea.

Newmont has repeatedly denied that submarine tailings disposal is an unsafe method of mine waste disposal.

"If the fish and water don't have high levels of metal in them, then there's no issue," Hock said, adding that Newmont is continuing to monitor the Buyat Bay water near the Minahasa mine even though it officially stopped all operations there in August.

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