Andrew Marshall, Jakarta – The Newmont Minahasa Raya gold mine on Indonesia's Sulawesi island has restarted operations after protesting locals were persuaded to end a blockade of the site, Newmont said on Monday.

"Supplies reached the mill and mine for the first time in a week and operations resumed," Newmont Minahasa Raya, a unit of Denver-based Newmont Mining Corp, said in a statement. But it said the underlying disagreement over land compensation for local landowners, which had prompted the blockade, "still needs to be resolved to the satisfaction of all parties concerned".

Last week, Newmont evacuated women, children and non-essential staff from the mine and halted operations after alleged intimidation by protesting locals. It was the second time a blockade had closed the mine in the last month.

The protesters are former landowners who are demanding higher compensation for the land used by the mine. But Newmont, North America's second largest gold producer, says it had given healthy compensation packages to some 400 landowners from 1989 to 1994, paying five times the market rate.

"Since the beginning of this dispute over recompensation for land use, the company has maintained that we were willing to talk to people who felt that they had been unfairly treated ... and review their claims on a case-by-case basis," Paul Lahti, general manager of the mine, said in the statement.

"It appears now that we will be able to restart that process." Officials have said Newmont Minahasa Raya's gold output in 1999 was 11 tonnes and targeted to reach 12 tonnes this year.