July 2, p1

PT Newmont Nusa Tenggara (NNT), a subsidiary of United States-based Newmont Corporation, has filed for international arbitration against the government over its ore-export ban policy, which the company claims has cost it dearly.

The firm had filed the arbitration with the Washington-based International Center for Settlement of Investment Disputes (ICSID), requesting an interim solution to allow NNT to resume exporting copper concentrate so that its Batu Hijau mine could resume operations, it said in a press statement on Tuesday.

The ore-export ban, which became effective on Jan. 12, had halted NNT'€™s Batu Hijau production and violated both the contract of work (CoW) between the company, in which Dutch firm Nusa Tenggara Partnership BV has a major shareholding, and the government, as well as a bilateral treaty between Indonesia and the Netherlands, said the company.

Your comments:

Don'€™t forget those smelters run on electricity, which Indonesia is short of now and will be in the next three years.

Dinero

Unfortunately this is what potential overseas investors see. Now there is no confidence for them to invest in Indonesia.

Petter

I say cut out the middleman, who doesn'€™t do anything constructive for his share anyway.

This way the company that invested in the infrastructure and that employs thousands and is the rightful heir to the land can make a better deal.

H. Jockey

Indonesia has to defend itself and use the World Trade Organization (WTO) articles on the right not to export raw material for the sake of creating more jobs, reducing poverty and saving the environment from the over exploitation of mines.

Some China companies have agreed to build smelters on site. Western companies that do not agree with this should leave this country immediately.

Indonesia only needs decent investors.

Newmont had years to raise this issue but everybody was banking on the regulation not being enforced. This is not the right approach.

We need legal predictability and that means enforcing regulations. Otherwise we will punish those that do comply.

This case has more to it. In the specific cases of Newmont and Freeport and maybe some others, Indonesia has explicitly committed to not undermine their massive investment by later applying new rules.

The bottom line is that the law simply will not apply to the companies and that is what they are fighting over '€” with good reason.

Kantisini

More likely Newmont has done the calculations and the smelters don'€™t return on investment for them. Return on investment may be the real problem, not the lack of desire to build smelters or add value.

Another thing is that the government wants all products processed in-country.

This includes anode slimes, which are difficult to process.

The Chinese and others process slimes because they have many feed sources.

Now companies must build the smelters, power plants and anode slime processing equipment. Then you need an area to out the waste, and the smelter will produce gas, which is discharged into the environment.

The Chinese have been pretty cheap. Beijing is full of sulfur pollution. Indonesia needs a lot of permits to do construction work, which are hard to get and make it longer to build a project, increasing the cost and lowering return on investment. If the government then takes 51 percent there is no reason to build; they lose money.

Market prices need to improve and the ore ban is good.

J. Lad

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