Foreign mining companies struggle in Indonesia

Featured - January 5th, 2013

Months after violent protests struck the Martabe gold mine in North Sumatra – a project worth $1 billion spanning 15 years – construction workers finally put the finishing touches on a waste water pipeline, underlining the struggle international mining companies face in Indonesia.

Hong Kong-listed G-Resources constructed the hilltop gold mine forecast to annually produce 250,000 ounces of gold, worth more than $400m at current prices, coupled with development projects such as communication programs and local job creation.

Thousand of residents tried to storm the mine complex in October before launching violent attacks on local government offices over the construction of the pipeline which will drain waste water from the mine to the Batang Toru river, reports the Financial Times.

“We reject the plan to dump waster in our river, even if they offer us many community projects,” says Sulaiman Siregar, head of Telo village, two kilometers from the Martabe site. “We use the river water for agriculture and some even use it for drinking.”

G-Resources chief executive Peter Albert said that waste water will be fully treated before being discharged and said that a “small group of agitators” created “mischief and misinformation”.

A veteran foreign mining executive said that large mining firms face wider challenges. “Many of the projects I’ve worked on in Indonesia start with good intentions toward the local community but end up in these kinds of disputes,” he told the Financial Times.