Jakarta – Controversy over Newmont's operations, sparked by allegations from non-governmental organizations that the firm polluted waters in North Sulawesi, has dealt another blow to the nation's mining industry and hurt investment in the sector, an official and expert said on Sunday.

"The case has sent another negative signal to foreign investors in the country's mining industry, which has long been troubled by countless problems and uncertainty," said Simon Sembiring, the Director General of Geology and Mineral Resources of the ministry of mining, at a media conference on Sunday.

Simon said that mining businesses not only provided significant revenue for the government, but also had a trickle-down effect in remote areas, such as in creating jobs for locals and improving their living standards.

Simon was commenting on a recent allegation that the operations of PT Newmont Minahasa Raya, the local unit of US-based gold mining giant Newmont Mining Corporation, had polluted waters in Buyat Bay, Minahasa regency, South Sulawesi, which led to the spread of a disease resembling one that once affected people in Minamata, Japan.

Minamata disease was caused by mercury disposed of by local industrial firms. However, according to Health Minister Achmad Sujudi, the preliminary examination of four residents from Minahasa, who were thought to have fallen ill due to pollution in Buyat Bay, had not found any indication of Minamata disease.

Newmont is among the eight companies that received a "green award" from the government this year. The firm was given the award for its operations in West Nusa Tenggara.

The Newmont case is the latest in a series of problems besetting the industry that have caused a significant drop in investment in the sector.

Recently, the government and the House of Representatives agreed to amend the forestry law to allow 13 mining companies to resume their open-pit mining operations in protected forests. The companies had secured contracts prior to the issuance of Forestry Law No: 44/1999, which bans open-pit mining in protected forests.

According to data from the Ministry of Energy and Mineral Resources, total investment in the mining sector – which reached US$1.15 billion in 1999 – continued to drop in the following years to $422.30 million in 2000, $319.73 million in 2001, $298.12 million in 2002 and $63.93 million in 2003.

Meanwhile, PL Coutrier, an executive of the Indonesian Mining Association (IMA) said the association regretted baseless reports that discredited the mining industry. "Given its highly significant contribution to the regions, it is understandable that we cannot afford this sector to weaken," said Coutrier.

Elsewhere, PT Newmont Nusa Tenggara, a local unit of Newmont in Sumbawa island, West Nusa Tenggara, said it had filed a criminal complaint against various individuals in the area for defamation following an allegation that its operations on the island had caused another outbreak of Minamata disease.

Eyebox - Newmont environment policy

• Newmont requires all of its operations to comply with local laws and regulations that apply to its activities.
• For the design and construction of new facilities, and the modification or expansion of existing facilities, Newmont adheres to the host country's laws and regulations. However, in some countries, particularly developing countries, minimum design criteria and standards for mining and milling operations either do not exist or require a standard lesser than that which Newmont has set as a minimum for the company. In such cases, Newmont's own (higher) standards are applied, often based on the Nevada Administrative Code governing the design, construction and operation of mining facilities.
• Similarly, when discharges to surface or ground waters are unavoidable, Newmont is required to comply with the host country's laws and regulations. If country laws are nonexistent, inadequate or incomplete, the US primary drinking water standards will be deemed the appropriate standards for the protection of human health.

[Source: www.newmont.com.]