Newmont Mining Corp will pay Indonesia US$30 million as part of an agreement reached by the two sides yesterday to end a civil suit over allegations the company polluted a bay.
The deal, announced at a joint media conference, will have no impact on the ongoing criminal trial of the US gold mining giant's top local executive on charges stemming from the same allegations at a now defunct mine on Sulawesi Island, 2,000km northeast of Jakarta.
The agreement requires Newmont's local subsidiary to pay US$30 million over 10 years to fund environmental monitoring and community development around the gold mine in exchange for the government dropping the civil case.
PHOTO: AP
"This is the best solution in solving this problem in the interests of the people of north Sulawesi," said Social Welfare Minister Abu Rizal Bakrie, stressing the criminal case would continue.
The Environment Ministry filed the suit last year and had been asking for US$133.6 million in damages.
Robert Gallagher, Newmont's vice president of Indonesian operations, said the deal "reaffirmed our long-term presence and investment in Indonesia and our commitment to the communities where we operate."
The company's legal troubles in Indonesia are being closely watched by foreign investors already anxious about the country's weak legal system, as well as by environmentalists eager to see if the government will punish a multinational mining company for the first time in recent history.
Prosecutors say Newmont Minahasa Raya, the company's Indonesian subsidiary, violated environmental laws by dumping millions of tonnes of pollutants into Buyat Bay on Sulawesi Island.
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