Arc Exploration Suspends Gold Project in Indonesia Due to Violent Protests
Australian mining company Arc Exploration (ASX: ARX) temporarily suspended the operation of its gold project at Bima in the Indonesia island of Sumbawa after violence broke out on the site on Christmas Eve.
Indonesian police allegedly fired directly at protesters who were accused of using machetes and lobbing Molotov cocktails that burned houses and government and commercial establishments.
Arc, in a filing on Wednesday with the Australian Stock Exchange, said it stopped exploration activities at Buma until the situation was resolved. Demonstrators against the venture blocked the port of Sape last week. The protesters are against mining and sought to revoke Arc's exploration licence issued by the Indonesian government.
Arc owns 95 per cent of the joint venture while the remaining 5 per cent is held by its Indonesian partner which is the actual holder of the licence that covers 250 square kilometers. Besides the Bima gold project, Arc has two other mining prospects in Indonesia, one in east Java and the other with Anglo American, in Papua province.
"No gold mine is being constructed.... As a consequence of the positive response received from the local communities and authorities, limited field work was recently resumed," Arc said in a statement. The Sydney-based firm stressed it was in a non-intrusive early stage of exploration only and it had fully complied with all legal, regulatory and licence requirements.
After the Indonesian police moved to reopen the port, reports said three protesters died from the violent clashes. Arc said there were only two deaths. The protests were spearheaded by the Anti-Mining People's Front which is linked to Walhi, the Indonesian arm of Friends of the Earth.
Derec Davies, spokesman for Friends of the Earth, said the civil unrest against Arc's gold project has spread to three other communities.
"Generally, gold mining is a bad thing.... Why (hasn't) the Foreign Minister, Kevin Rudd, or the Arc board called for a halt to the violence?" he told The Australian.
The National Human Rights Commission of Indonesia called the shooting of protesters a serious violation of human rights and is conducting its investigation of the clashes.
