Jan 02 2013

FT.com: Environment protests hit Sumatra gold mine

As construction workers put the finishing touches to a waste water pipeline at the hilltop Martabe gold mine in North Sumatra, dozens of police and soldiers armed with machine guns and knives keep close watch nearby.

Like many other international mining companies in Indonesia, Hong Kong-listed G-Resources went to great lengths to win the support of the local community for a large gold project that had been 15 years in the making.

With nearly $1bn spent on mine construction and annual production forecast at 250,000 ounces of gold (worth more than $400m at current prices), Martabe looked set to be one of the most successful large mines to come on stream in Indonesia in recent years, at a time when the investment climate has been damaged by resource nationalism and regulatory uncertainty.

But all the development projects, communication programmes and local job creation appeared to have been in vain when more than a thousand residents tried to storm the mine complex in October before launching a violent attack on local government offices.

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