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HK listed miner G-Resources begins to lay off workers in Indonesia

Publication Date : 05-10-2012


G-Resources Group Ltd. announced yesterday that it had laid off as many as 300 of its workers at the Hong Kong-listed gold producer's subsidiary, PT Agincourt Resources, amid the suspension of its Martabe gold mine in North Sumatra of Indonesia following a waste dispute with local residents.

G-Resources' president director, Peter Geoffrey Albert, told a press briefing in Medan, North Sumatra, that the company "had no choice but to start dismissing its workers gradually for the company's sake."

"After we officially ceased our operations on Monday, we had practically no income to pay our employees or fund our operations," said Albert, who was accompanied by Agincourt's spokeswoman, Katarina Siburian.

According to Albert, while the firm obtained at least US$1.5 million per day when the gold mine was at full production, G-Resources automatically lost its income when it ceased its mining activities on Monday over an ongoing dispute with local residents surrounding the firm's waste management.

The Martabe gold mine, which has an investment of $900 million, spans 162,900 hectares and has reserves of 7.86 million ounces of gold and 73.48 million ounces of silver, according to the company's data.

In July this year, G-Resources signed an agreement for the divestment of 5 per cent of shares in Agincourt to the administrations of North Sumatra province and South Tapanuli regency.

G-Resources, which began gold exploitation in August after almost 15 years of exploring the mining site, originally hoped that the Martabe gold mine, which is located in South Tapanuli, North Sumatra, could begin full operations in early 2013.

However, the prolonged dispute over the installation of a 2.7-kilometre liquid waste pipe to carry waste to Batang Toru River in South Tapanuli triggered protests from local residents, who thought the plan would affect their livelihoods.

In September, thousands of residents living around the mine staged a protest over the installation plan.

Albert said the company was still "open" for any discussions with relevant parties to settle the dispute.

The head of North Sumatra's provincial mining office, Untungta Kaban, told The Jakarta Post in Medan that he regretted the dismissals, adding that his office would prepare to facilitate more intensive communications between the company and the local community so the firm could restart its mining activities.

"We did not expect them [G-Resources] to shed their workers, but what is done, is done," he said.

The Energy and Mineral Resources Ministry's minerals and coal director general, Thamrin Sihite, told the Post over the phone that his office would seek corroboration from the firm over its latest move to lay off workers.

"The termination of the workers' employment is the last thing we want, although there must be a reason behind the move. We will verify the information [with G-Resources] immediately," he said.

One of the laid off workers, Rahmat Nasution, 37, a father of three who lives in Hapesong Baru, Batang Toru subdistrict, said he was "shocked" by the firm's decision.

"Never in my life did I imagine that I would be fired from the company but I have to accept this decision, which was triggered by some hard-headed residents," he said.


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