Two years of judicial wrangling and tens of millions of dollars in legal costs won’t keep Newmont Mining from expanding its Indonesian operations.
Following Tuesday’s not-guilty verdict on charges of polluting coastal waters, Newmont chief executive Wayne Murdy said the firm will consider expansion of mining in Indonesia.
Murdy said Newmont will proceed with a feasibility study on expanding its Batu Hijau copper and gold mine, as well as explore the initial development of a nearby copper property on Sumbawa island.
Newmont’s now-defunct Minahasa gold mine on the island of Sulawesi was where Indonesian authorities alleged that mine tailings polluted Buyat Bay with mercury and arsenic. But an Indonesian court ruled there was no proof that local villagers or fishing habitats were harmed by the mine waste.
Murdy said the favorable verdict “creates an environment that is conducive to long-term investment.” However, a guilty verdict “would have changed our decision” on new investment, Murdy said.
The verdict was saluted throughout the mining industry.
“This has opened up the doors (for foreign investment) even wider than before,” said John Haigh, a spokesman for Denver-based Ascendant Copper Corp., with mining operations in Ecuador.
While the verdict doesn’t guarantee a problem-free future for Newmont in Indonesia, Haigh said Newmont apparently has decided that the value of developing its Indonesian holdings outweighs the risks.
Ta Li, a Denver mining consultant with Washington Group International, said the verdict is a win for Newmont and Indonesia.
“Indonesia wins because it will further strengthen their economies and standard of living through sustainable economic development,” Li said. “It also will sustain foreign investments to the country.”
Indonesia’s government expects mining investment in the country to rise to $1.13 billion this year from $880 million in 2006.
In a related event Tuesday, Newmont shareholders approved a resolution that asks Newmont to conduct a study on why its worldwide mining operations generate social and environmental controversies, and suggest ways to mitigate the problems.
In addition to Indonesia, controversies have developed at Newmont sites in Peru, Ghana and parts of North America.
The resolution, drafted by a consortium of religious groups and supported by Newmont, was approved by 91.6 percent of voting shareholders at Newmont’s annual meeting in Wilmington, Del.
“Newmont is proud to have encouraged our shareholders to vote for it,” said company spokesman Omar Jabara. “Newmont’s leadership believes that supporting the resolution was not only the right thing to do but that it will make us better and stronger.”
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
