POOR ASX DISCLOSURE FROM NEWCREST
Sealed section January 8
In another example of poor disclosure, Newcrest Mining has failed to inform the market about a fresh outbreak of violence at its gold mining project in eastern Indonesia reported by AAP this morning, in which one person was reportedly shot dead and another beaten to death by police.
Newcrest was forced to shut down the project on remote Halmahera island for five weeks late last year after around 2,000 local protesters occupied the site.
AAP is reporting the latest protests have been sparked by Newcrest opening its new Toguraci mine in protected forest areas, allegedly without proper government approval. Activists are also demanding Newcrest distribute $80m in profits to local communities.
The full AAP story is here:
MINING, CLEAR-FELLING AND INDONESIA
Sealed section January 9
It remains completely unacceptable that Newcrest Mining has still not made a statement to the ASX about the fighting and deaths at its Indonesian goldmine early yesterday. The press is full of it and Newcrest shares dived 41c to $12.85 yesterday, albeit on a day when resource stocks weakened.
The stock bounced 21c to $13.06 this morning so the market clearly isn’t that concerned. However, the initial dive would suggest it warranted a full statement to the ASX and investors often want to know what is going on in a company even when it may not be technically “material” to the share price.
Tim Palmer had an interesting yarn on AM this morning in which Newcrest admitted making payments to the Brimob police units that opened fire on protestors outside it’s Togaruci mine. However, they claim it is only covering expenses and not salaries, although there’s not a lot of difference.
Meanwhile, an expat in Indonesia writes:
“I assume by Newcrest Mining activities in Halmahera Indonesia you reported yesterday, you actually mean PT Nusa Halmahera (PT NHM). Whilst it probably makes good environmental copy it would be difficult to get things more incorrect.
PT NHM do have all the necessary permits for their activities and have done so since 1997. The two leading so called “traditional owners and activists” are not even from the area. These two ratbags have actually been running two of largest illegal mines and environmental disasters in the region (it was really lazy research by the reporter, just compare the names of the activists and check out Minergy Nov 03 2003 where one of them actually brags about his mining activities).
Now it is important to realise that illegal mining is not two blokes and a shovel but a multi-million dollar industry in Indonesia. The sad part is particularly in the Halmahera region illegal miners utilise the local untrained, unprotected villagers and mercury extraction with devastating effects. In addition, an illegal makes no attempt at rehabilitation of the area on closure so it is environmental rape at its very ugliest.
Things have changed a lot since the days of Freeport it is shame to see you, indirectly though it may be, supporting the greatest scourge of Indonesia, the illegal miners and loggers. It is not an exaggeration to say that within ten years the only viable forest left in Indonesia will be on international mining leases.
Oh, by the way, PT NHM has spent approximately 20 billion rupiah in community projects thus far, whilst the illegals contribute exactly nothing expect death, violence, pollution and destruction.
A subscriber with lots of Indonesian experience writes:
The guy talking about illegal mining in Indonesia is sort of right, and wrong Uncle Stevey.
What happens is local authorities, with the nod from Jakarta set up mining ‘teams’ and operations, and even tell the mine that they’re going to start ‘digging’ probably from the other side (or perhaps a bit east or west).
This of course provides the locals with jobs, money, and kickbacks to the authorities and Jakarta. After all, it’s their land.
The “cleanup” the guy raves on about is bullshit though – no-one can fill a zillion cubit feet hole whether up top or underground. But, Indonesia is so lush with red volcanic soil (in that part) that the ‘jungle’ will soon grow over any mine anyway (excepting east of Sumbawa where it gets incredibly dry).
Many, many mines all over Indonesia have been ‘closed’ due to this type of ‘illegal mining’. (Still, it’s hard to see how it’s technically illegal given the land belongs to the locals in the first place).
If you go far, far beyond Bali and Java you see them all over the place. The foreign ‘owners’ eventually stop operations or sort of semi pull out, trying to ‘teach’ the local authorities and Jakarta a lesson in missed taxes and royalties.
But the locals just keep on digging away in the traditional Indonesian way: very slowly and not very methodically. They do however manage to feed themselves and perhaps make a fair bit more than if they worked for the mine.
The moral of the story: It’s the Indonesian’s land and they should, and will do with it what the deem fit. The ‘contracts’ and ‘leases’ the mines have organised over the decades don’t help the people in any major way – save for a few employees in the upper echelons – and thus the miners can’t be considered victims.
It’s just the same old story with Asia – don’t buy shares in a mining stock playing in Asia unless you’re willing and able to lose it.
Interesting response to my humble scribblings
n Mining, (always impressed by intelligent come backs containing ‘raving’ and ‘bullshit’ other emotive expressions).
Unfortunately the writer completely misses the point. No one said that the mining industry completely rehabilitates the mines site on completion but an attempt is made (no doubt forced upon them by international media pressure these days but it is done). I did not really want to end sounding like a apologist for the mining industry but wanted to raise the point that illegal miners and foresters usually means a lot more than traditional villagers trying to eke out a living. Whether or not foreign mining should be allowed is another matter all together.
Your contributor still manages to confuses local traditional based mining with the multi-million dollar illegal (acknowledged can be Jakarta sanctioned in one way or another) mining and logging activities with little or no safety or environmental controls.
What possible motive (although I can suspect one) could someone have for trying to pretend that illegal mining and logging is not one the major crisis facing
today and is very very
rarely run for the benefit of the local people.