Jakarta, Indonesia – Newmont Mining Corp. said Tuesday it wants to expand investment in Indonesia despite concerns about sabotage at one of its exploration sites and an ongoing legal battle against a top U.S. executive over alleged pollution.
“We’re here for the long run,” chief executive Richard T. O’Brien said. “If we can get support of the local and central government, we’ll continue doing what we’re doing.”
Foreign investors all but abandoned Indonesia – which boasts some of the largest gold, tin, copper and nickel deposits – after the 1997-98 Asian financial crisis. Lingering concerns about corruption, rising prices, red tape and labor problems have kept most from returning.
Denver-based Newmont, one of the world’s largest gold producers, began exploration in the sprawling archipelagic nation two decades ago and intends to stay.
“We have a number of projects on the books where our commitment in Indonesia could go up,” said O’Brien, who took over as chief executive three weeks ago.
Newmont wants to put in a third grinding mill at its Batu Hijau mine on Sumbawa island and is considering opening another mine to the east, although drilling has been suspended since March when protesters set fire at an exploration site, he said.
“We need to make sure these people want us there, that they want a mine and all the opportunities that come with that,” O’Brien said. “If they do … we need to finish our exploration program” so we can “determine whether or not that project will be economically viable.”
Another concern has been the recent 21-month criminal trial against Newmont executive Richard Ness, who along with the company was found not guilty of dumping dangerous amounts of toxic waste into a bay off Sulawesi island. Prosecutors are appealing the verdict.
“When people bring charges which end up being thrown out of court in a total acquittal, that’s a problem,” O’Brien said. “But I have to give the court a lot of credit for taking the time to understand the case … that’s a respectable way of doing business.”
A draft mining bill moving its way slowly through Indonesia’s legislature also has made many foreign mining companies nervous. It would replace the Suharto-era system under which mining contracts were signed between the central government and corporations, requiring them to instead to negotiate joint ventures with local partners and governments.
“I don’t want to be anxious about something we haven’t seen yet, we’ll evaluate it when it comes out,” O’Brien said. “But we’re in the mining business … that means sometimes there will be bumps in road.”
