ENVIRONMENT: MINING WATCHDOG WARNS INVESTORS ABOUT GOLD GIANT
WASHINGTON, Feb 8, 2001 (Inter Press Service via COMTEX) -- Environmentalists monitoring the activities of the world's second-largest gold producer, Newmont Mining Company, say that financial losses for the last quarter of 2000 are the least of the company's problems.
Yesterday, the Denver-based corporation released its final earnings for last year. Despite a net loss of $18.9 million during the final quarter of 2000, which was attributed to low gold prices, Wayne Murdy, CEO and president of Newmont, tried hard to ease investors' minds.
"We had an outstanding fourth quarter that allowed us to exceed most of our goals for 2000," said Murdy at a press conference in Denver yesterday. "The continued low gold price was hugely disappointing as it reduced earnings and eroded our share price and investor interest in all gold stocks."
But the California-based group Project Underground argue that shareholders should also be concerned about the company's "risky" mining operations which harm people and the environment worldwide.
"Anyone thinking of investing in this company should be aware that it brings plenty of risk," said Lwazi Kubukeli, the organization's program coordinator.
He called the company -- which has gold-producing assets in Indonesia, Mexico, Peru, Uzbekistan and the United States -- one of the "worst ambassadors of corporate America."
"In the last year the company's disregard for human rights and the environment has become dramatically clear," said Kubukeli.
He said a pipeline carrying mining waste to the ocean from Newmont's Batu Hijau mine on the island of Sumbawa in Indonesia resulted in a major spill of mine waste on land last month. The pipeline incorporated a technology called Submarine Tailing Disposal, which involves disposing the mine tailings or waste into the sea.
Edward Pressman, director of technical affairs for Newmont in Indonesia said that the mine tailings were non-toxic and the pipeline will be repaired.
"All the defective sections are in the on-shore section of the tailings pipeline and will be replaced by March, when the new pipe sections will be delivered by the manufacturer," wrote Pressman in an editorial in the Jakarta Post on Jan. 27.
Indonesian environmentalists, however, are not satisfied and are asking the government to close the mine temporarily.
"We demand that the system be changed," said Longgena Ginting, head of the advocacy division of the Indonesian Forum for the Environment (also known as Walhi). "Submarine Tailing Disposal is not safe technology," said Longgena.
The accident is not the first Newmont has had in Indonesia. Between July and August 1998, pipeline spills at its Minahasa Raya gold mine located in North Sulawesi contaminated the ocean with mercury, lead, arsenic, copper and other toxic compounds. Environmentalists claim that fish stocks have diminished as a result.
Kubukeli also pointed out that Newmont's offices in Lombok, Indonesia have been bombed twice -- once in October and once last week. While it is unclear who is doing the bombing, he said it is clear that mining in Indonesia is a risky business venture.
"Combined with the political uncertainty surrounding Indonesia, investors should beware when buying into Newmont," he said.
Project Underground also pointed out that the company has been implicated in the scandal unravelling around the fugitive spy-chief of the former President Alberto Fujimori, Vladimiro Montesinos.
Reports coming out of Lima claim that transcripts of a video prove that Montesinos pressured a judge to rule in favor of Newmont, in a dispute with its partners in the Yanacocha gold mine. After the video tape was released to the public, Montesinos was forced to flee the country on a midnight flight.
"As investigations proceed, the depth of the company's involvement, rumored to be extensive, will be exposed," he said. If the company is found to be directly involved in the bribery scheme, Newmont will have violated the U.S. Foreign Corrupt Practices Act.
Last year when Newmont held its annual meeting, Project Underground brought indigenous groups from the Peruvian Andes to Denver to tell shareholders about the harm they felt the company's operations was doing to their communities.
Segunda Castrejon Vallejo of the village Cajamarco told shareholders that the Yanacocha gold mine -- Latin America's largest -- polluted the water and harmed animal and plant life.
Last June, farmers said Newmont spilled 151 kilograms of mercury in the village of Choropampa.
"Hundreds of local people were exposed to this deadly neurotoxic," said Kubukeli, adding that classic symptoms of mercury poisoning were reported.
In anticipation of the company's announced earnings, Project Underground placed advertisements throughout Denver. The ads were designed to resemble a promotion for an upcoming film, in order to catch the attention of shareholders and city residents alike.
"Newmont Gold presents...a true story...Bombs, Leaks and Spy Scandals," said the poster. "Declining share value...risk... liability...volatility...this is just the beginning."
Copyright (c) 2001 IPS-Inter Press Service. All Rights Reserved.
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