Newmont considers expanding operations in RI after acquittal

MANADO, North Sulawesi (AP): Newmont Mining Corp. said Wednesday it was considering expanding its investment in Indonesia following the acquittal of a U.S. executive accused of dumping dangerous levels of toxins into a bay on Sulawesi island, sickening villagers.

But analysts say they don't expect foreign investors - who remain wary about corruption, poor infrastructure, red tape and legal uncertainties - to flock to the resource-rich nation as a result of the high-profile verdict.

Mining companies are likely to wait for revisions to a closely-watched draft law that would force them to sign agreements with regional authorities instead of the central government and make it impossible to bring disputes before international arbitration.

Robert Gallagher, Newmont's vice president for operations in Indonesia, said Tuesday's decision to acquit Richard Ness on pollution charges meant the company could go ahead with plans to boost capacity at its Batu Hijau copper and gold mine on SumbawaIsland by 50 percent.

"That would result in about a 30 percent to 40 percent increase in metal production," he said, putting the mine's present output at around 500,000 troy ounces of gold a year, and just over 270,000 metric tons of copper.

"Much depends on how we feel about the political risks, the legal risks, etc., and this (court) decision is certainly a tick in the right box for that," Gallagher said.

Earlier, the Denver-based company said it would rethink future investments in Indonesia if Ness, the president-director of Newmont's local subsidiary, was found guilty. He had faced up to 10 years in prison and, together with Newmont, a US$160,000(euro120,000) fine.

Presiding Judge Ridwan Damanik said documents and testimony presented during the 21-month criminal trial proved that waste rock dumped into Buyat Bay by the company's now-defunct Sulawesi mine did not exceed government standards.

"There also is not enough evidence that people suffered from health problems," Damanik said, referring to claims that villagers living near Buyat Bay, 2,000 kilometers (1,300 miles)northeast of Jakarta, were suffering from skin disease, unexplained lumps, breathing difficulties and dizziness.

Prosecutors said they would appeal. (**)
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