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T Agincourt Resources, a subsidiary of the Hong Kong-listed gold producer G-Resources Group Ltd., has announced that it would temporarily stop the operation of its Martabe gold mine in North Sumatra following an ongoing dispute with local residents over the firm’s waste management.

G-Resources president director Peter Geoffrey said the protracted row over the installation of liquid waste pipes with the regional government had affected operations in Martabe.

“The firm has no choice but to save every dollar we have so that we will be able to start the gold mine all over again as soon as the problem is solved,” he said in an email statement to The Jakarta Post.

According to Geoffrey, under the Environmental Impact Analysis (Amdal) that was issued by the South Tapanuli regent on March 13, 2008, Agincourt’s waste management system had gone through an intensive feasibility study and had met the quality standards of the Environment Minister’s decree No. 202/2004.

G-Resources Group Ltd. is the first foreign mining company that was able to exploit gold and silver in North Sumatra, beginning the gold exploitation in August after almost 15 years of exploring the mine site. The company initially hopes that the Martabe gold mine can start its full operation in early 2013.

Energy and Mineral Resources Minister Jero Wacik told reporters in Jakarta on Monday that he had asked the officials within the ministry’s minerals and coal directorate to help the company in convincing the local community on the benefits of the Martabe gold mine.

“They [the local community] feel that they did not get anything beneficial from it [the gold mine] and thus they reject the plan from the company. Therefore, the company must improve its approach to the community,” he said.

Separately, the ministry’s minerals and coal director general, Thamrin Sihite, said that the local residences were still uncertain whether the planned waste pipe to the Batang Toru river would affect their livelihoods.

“The central government has sent a team to resolve the issue. We have also asked the police to secure the situation should the pipe installation project continue,” he said, adding that the government wanted the problem to be resolved “as soon as possible”.

Indonesian Forum for the Environment (Walhi) mining and energy campaign manager Pius Ginting told the Post over the phone that the nongovernmental organization appreciated Agincourt’s move to halt its operation, citing that the
complaints from the residences were “reasonable”.

“According to the report from local residences, it is said in the Amdal that the Batang Toru river is simply used by the residences for cleansing purposes. However, in reality, the residences actually consume the water from Batang Toru for their daily needs,” he said.

“The government must put the interests of the society first above anything else. If the majority of the residences [in South Tapanuli] object the Agincourt’s plan, the government must obey the residences,” he said.

The Martabe gold mine, which has an investment of US$900 million, spans 162,900 hectares, 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 percent of shares in PT Agincourt Resources to the governments of North Sumatra and South Tapanuli regency.

In early September, Agincourt stopped the installation of a 2.7-kilometer pipe to carry waste to Batang Toru river in South Tapanuli following protests from local residents, who opposed the company’s plan, citing that disposing liquid waste to the river could pose a threat to the environment.