Indonesia seeks international support in breaking Newmont's contract

The Associated Press , Jakarta | Mon, 03/03/2008 4:45 PM | Business

Indonesia threatened to terminate the operating contract of U.S. gold producing giant, Newmont Mining Corp., after if it failed to meet a Monday deadline to divest 10 percent of its stake in one of its subsidiaries.

The two sides said separately they would bring the case before the United Nations Commission on International Trade Law.

"Newmont has failed to honor its contract with Indonesia, so we have decided to file for arbitration," said Yusgiantoro Purnomo, Indonesia's Energy and Mineral Resources Minister, adding that the government would seek to have Newmont's contract terminated.

Newmont has a 45 percent stake and a local unit of Japan's Sumitomo Corp. has a 35 percent share in PT Newmont Nusa Tenggara, which owns the Batu Hijau mine on the island of Sumbawa, about 950 miles (1,528 kilometers) east of Jakarta.

Indonesia's PT Pukuafu Indah has a 20 percent stake in the joint venture.

Newmont said in a statement after talks broke down Monday that the government had no right to seek termination of its contract and said it too would "file arbitration to insure that all rights
are preserved."

Under terms of a 1986 contract with Indonesia, Newmont and any non-Indonesian partners are required to sell 51 percent of the mine in stepped phases to the Indonesia government or nationals by March 31, 2010. (****)

Comments (0) | Post comment

A | A | A |