Five reasons not to buy shares in the Toka Tindung gold mining project

Five reasons not to buy shares in the gold mining project Toka Tindung/ North Sulawesi, Indonesia – Archipelago Resources Plc/ Australia

JATAM - WALHI - KIARA - AMMALTA - YSN Press Release

3 March 2010

On February 26th 2010, Archipelago Resources PLC/ Australia – announced it had arranged a placing of 102,000,000 new ordinary shares of 1 pence each ("Placing Shares") to institutional investors at a price of 30 pence per Placing Shares to raise GBP30.6 million to provide up to approximately 80% of the funds required to complete construction of the project. The remaining GBP 7.0 million production cost is also expected to be raised via institutional shares as banks couldn’t be convinced to provide working capital.
 
The new shares are available from March 4th 2010, although the Toka Tindung gold mine of the two Indonesian registered companies PT Meares Soputan Mining (MSN) and PT Tambang Tondano Nusajaya (TTN) is from its beginning a highly controversial one. The initial plan to dump tailings into the sea was denied in December 2006 by the Indonesian Minister For Environment due to the intervention of thousands of local fishing people. The governor of North Sulawesi province denied his consent to the storage of tailings on land in February 2007. The original Environmental Impact Assessment (EIA) is already expired, and the company departs on a production permit that was issued in October 2009 violating valid Indonesian law.  

Therefore we urge the public not to buy shares in this project from Archipelago Resources PLC/ Australia which is registered at AIM London and plans a dual listing on the Australian Stock Exchange (ASX)  because of the risks inherent for the local inhabitants in the surrounding of the gold mine and the people of North Sulawesi in general as well as the risks for the investor. There are five reasons NOT TO INVEST IN TOKA TINDUNG GOLD MINE:

FIRST, the gold mine from its very beginning has been strongly rejected by the local people. The majority of  North Sulawesi people, including local fishing communities, the North Sulawesi Fishing industry, the North Sulawesi Tourism and Diving industry, environmentally concerned groups and the people in the surroundings of the mine, strongly reject the project because they face the largest risk. In December 2009 the North Sulawesi Coastal People’s Alliance Against Tailings (AMMALTA) filed a law suit against the former Indonesian Minister for Environment demanding the EIA  to be cancelled because it violates valid Indonesian government regulations. The law suit is still ongoing.

SECOND, granting the EIA violated two valid Indonesian laws. On  October 5th, 2009, former Minister For Environment, Rahmat Witoelar, signed the companies’ EIA, although in the past he had repeatedly stated in the public that he wouldn’t grant his permission. He signed unexpectedly during his five last days in office as Minister For Environment and three days after the new government regulation UU No 32/ 2009 relating Environment Management and Conservation had replaced the old regulation UU No 23/ 1997. Signing the EIA, Witoelar violated two laws: Signing the EIA is not the minister’s but the provincial governor’s authority and prerogative right. He signed the EIA on grounds of a government regulation which had already been cancelled.

THIRD. The security forces of the company violated human rights when they – provenly -attacked  peaceful villagers returning from a mass demonstration against Toka Tindung in Manado in July 2006.  Several villagers suffered severe injuries and a woman preganant seven months a miscarriage as she was repeatedly kicked into her stomach. In the October 4th edition of the local newspaper Komentar North Sulawesi’s vice governor, Freddy Sualang was cited: “It can’t be tolerated that people peacefully demonstrating are attacked and intimidated.”  Despite this the case was never seriously investigated.

FOURTH. Toka Tindung inherits the risk to severely damage the viable economy of North Sulawesi Province which heavily relies on its main pillars Fishery, Agriculture and Tourism because it is located in a densely populated region in the vicinity of its industrial heart and international harbor Bitung and above the major fishing region Rinondoran Bay between Lembeh and Bangka. Latter are also premier dive areas already renowned in the world.  It is feared that thousands of jobs will be lost permanently if these sectors will be harmed by the impact of Toka Tindung which will only produce gold for a maximum of 6 – 8 years and provide a little more than 100 jobs for local people.

FIFTH. Toka Tindung endangers the local and regional environment. Villages in the immediate vicinity are at risk to be buried in mud floods when the storage facility overspills during the rainy season. This happened once during construction in March 2007.  The project will require huge amounts of water which will finally endanger the clean water supply for Bitung, a city of 250,000 and industrial heart of North Sulawesi province. The nature reserves Tangkoko and Dua Saudara which border Toka Tindung host some wildlife species most unique and rare, in an ecosystem which is most sensitive to human interference, the Wallacea. If  Toka Tindung should enter production, the mixture of cyanide and acids released into the ground water system is feared to harm the ecosystem that hosts more than 224 birds species among which are 41 endemic, and 127 mammals (62% are endemic). The tailing storage facilities planned by the company are situated in an area which is classified as a high risk earth quake area prone to Tsunami and volcanic eruption. For this reason it cannot be granted that the tailings produced by Toka Tindung will not enter the eco system, the more so in Indonesia which is known for its most corrupt and inefficient business climate.  

If you are a responsible investor concerned about the environment and people’s health and social equality, please reconsider your engagement in Toka Tindung and refrain from buying shares in this gold mine..

Media Contact

Luluk Uliyah, JATAM, HP. 0815 9480 246
Berry Nahdian Furqon, WALHI, HP. 0812 511 0979
Riza Damanik, KIARA, HP. 0818 773 515
Yull Takaliuang, YSN, 0813 4001 7722
Didi Koleangan, AMMALTA, 0813 4014 7722