Newmont arm acquitted of pollution charges

Indonesian court verdict reassures foreign companies on investments.

An Indonesian court acquitted a local unit of Newmont Mining Corp, the world's second-largest gold miner, and a US executive of charges that they polluted a bay in the Southeast Asian nation with mercury and arsenic.

Richard Ness, president of a now-closed gold mine, and PT Newmont Minahasa Raya were found not guilty as the prosecution failed to prove its case, Ridwan Damanik, the presiding judge, told the district court in Manado, North Sulawesi.

The decision may reassure investors and boost President Susilo Bambang Yudhoyono's drive to attract $22 billion in investment a year to a country rich in metals. Wayne Murdy, Newmont's chief executive, said before the verdict the company might reconsider future investment in Indonesia if found guilty.

"This is a milestone case,'' said Todung Mulya Lubis, a partner with Lubis, Santosa & Maulana. "It will restore Indonesia's image as a safe place for investors as judges on this case were very firm.''

The prosecution, representing the environment ministry, had asked that the unit of Denver-based Newmont be fined 1 billion rupiah ($110,000) and Ness be sentenced to three years in jail for allegedly poisoning villagers. Only one of the water-sample tests examined during the trial found against Newmont's favour.

"Right now, I am happy to be exonerated,'' Ness, 57, said in an interview. "It was good to hear what we knew always: that Buyat Bay wasn't polluted.'' The trial heard testimony from 63 witnesses over 21 months.

The prosecution has 14 days to appeal against the decision to the high court. Still, Hoetomo, deputy minister for compliance at the environment ministry, said while the ministry was disappointed, "we do respect the verdict''.

Indonesia's government wants to attract more overseas investment to benefit from metals prices that have risen to records as miners feed surging global demand, led by China. The Asian nation's economy grew 11.1 per cent in the first quarter, faster than the 10.4 per cent rate in the previous three months.