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Newmont Mining Suspends Exploration on Indonesian Island After Arson Attack

Newmont Mining Corporation has suspended gold and copper exploration on the Indonesian island of Sumbawa after unknown assailants burned down a camp for its workers.

No one was injured in the attack Sunday at the Newmont camp, which is located around 1500 kilometers east of Jakarta and 60 kilometers from the company's massive Batu Hijau gold and copper mine on Indonesia's eastern Sumbawa Island.

Newmont spokesman Kasan Mulyono says it is not clear who the attackers were or why they had targeted the camp, but the U.S. company had decided to suspend gold and copper exploration for the time being.

"What we stopped is our exploration to find the gold because the camp was burned down by a community group. We will stop the exploration project until further review," Kasan says.

The spokesman said operations at the Batu Hijau mine on Sumbawa would not be affected by the suspension.

Last month Newmont, the world's largest gold mining company, agreed to pay the Indonesian government $30 million in an out-of-court settlement over a civil case alleging the company had polluted a bay near another of its Indonesian mines.

But that settlement does not resolve the criminal case filed against Newmont Indonesia's American head, Richard Ness, who faces up to 10 years in prison if convicted on the pollution charges.

Ness denies any wrongdoing.

Other foreign mining companies in Indonesia have also seen an increase in protests and attacks against them during the last year.

Political analyst from Jakarta's University of Indonesia, Indria Samego, says these problems could prevent foreign companies from investing in Indonesia's natural resource sector.

"(The) business climate in Indonesia will be disturbed because it seems to be there is no regulation," she said. "Businessmen worry about the political guarantee to expand business activities in this country."

Another American owned mining company, Freeport-McMoRan Copper and Gold Incorporated, suspended operations at its mine in Indonesia's easternmost province of Papua last month after protesters blocked a road leading to the site.

Demonstrations against Freeport in Papua's provincial capital of Jayapura last week resulted in the death of three policemen and one soldier and the arrest of more than 50 people.

On Monday, demonstrations continued against Freeport outside the U.S. embassy in Jakarta with protesters demanding the closure of the mine.