August 2, 2005

‘No crime’ Newmont says on eve of pollution trial

By Karima Anjani and Tomi Soetjipto

JAKARTA (Reuters) - U.S.-based Newmont Mining Corp denied
on Tuesday any wrongdoing by an Indonesian subsidiary charged
with pollution, days before it and its American boss face a
trial investors and environmentalists will be watching closely.

PT Newmont Minahasa Raya and President Director Richard
Ness are accused of disposal of toxic waste that polluted a bay
in eastern Indonesia.

The trial begins on Friday in Sulawesi island's Manado. If
found guilty, Ness, who has lived in Indonesia for decades,
could be locked up for up to 10 years, and the firm could be

Analysts say legal defeat for Newmont, the world's biggest
gold miner, could send a chilling signal to investors already
concerned about coping with corruption and bureaucracy in
Indonesia, the world's fourth most-populous country,

Environmentalists counter that Indonesia has been too lax
for too long when it comes to making companies follow the rules
in the sprawling archipelago of some 17,000 islands.

Newmont itself says it is innocent.

"There has been no crime committed and (it) looks like
we're going to end up in court to show that, and we anticipate
that we will show that," Newmont's vice president for
Indonesian operations, Robert Gallagher, told reporters.

The trial comes at a time when foreign investment has begun
to revive in Indonesia, partly on promises by President Susilo
Bambang Yudhoyono, who took power last October, to make the
country an easier place to do business.

A guilty verdict would harm Newmont's image in a nation
where it still has ambitious plans. Five years ago, Newmont
started operations of Asia's second-largest copper mine, Batu
Hijau, on Indonesia's Sumbawa island. That complex has a mine
life of more than 20 years.

The charges against Newmont revolve around waste disposal
containing mercury and arsenic in Buyat Bay, 2,200 km (1,400
miles) northeast of Jakarta, which prosecutors say polluted the
waters and contaminated the food chain, causing skin disease
among surrounding villagers.

Asked how he felt about the trial, Newmont's Ness said: "I
guess nobody wants to be accused of committing a crime, nobody
wants to be accused of hurting people, creating pollution."

The mine in North Sulawesi opened in 1996 and closed last
August due to depleted reserves. Newmont has been carrying out
reclamation work since then, but the pollution charges relate
to when the mine was operational.

Newmont says its disposal processes at the bay were
approved by the government, and several independent studies
have supported the company's claim they did not pollute the

However, a government-commissioned multi-agency probe and a
police study found otherwise.

Some criticism of Indonesia over the case has centered less
on details of the charges than on whether it was necessary to
imprison several company executives while investigations were
under way, and restrict their travel for a time after they were

Indonesia operations represent about six percent of
Newmont's global sales worldwide in 2004.