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Newmont Mining Files Arbitration over Export Restrictions in Indonesia

Newmont Mining has filed an international arbitration over export restrictions in Indonesia following the companys force majeure in June.Newmont, which ...

Admin
|Jul 1|magazine7 min read

Newmont Mining has filed an international arbitration over export restrictions in Indonesia following the company’s force majeure in June.

Newmont, which has suspended all operations at its Batu Hijau copper mine in Indonesia, is fighting with the Indonesia government over an escalating export tax imposed in January. The company and follow miner Freeport-McMoRan Copper & Gold Inc. say the tax violates its current mining contracts with the country.

“Despite our best efforts over the last six months to resolve the export issues through good faith commitments to support the Government’s policy, PTNNT has been unable to convince the Government that our CoW should guide resolution of our differences,” said Martiono Hadianto, President Director of PTNNT.

In the filing made with the International Center for the Settlement of Investment Disputes, PTNNT (PT Newmont Nusa Tenggara) state their intention to request interim, injunctive relief to allow PTNNT to resume exporting copper concentrate so that Batu Hijau operations can be restarted.

“As a result, PTNNT and its shareholders are left with no option but to seek relief through international arbitration to ensure our stakeholders’ jobs, rights, and interests are protected. We want continued dialogue with the Government to lead to a resolution outside of arbitration. In the meantime, we have an obligation to protect the value of Batu Hijau and the thousands of jobs it provides, as we are still unable to export copper concentrate due to the regulations.”

The tax on concentrate exports is part of Indonesia’s outgoing drive to force miners to build smelters and processing plants in Southeast Asia’s largest economy. Global prices for copper, however, continue to be rattled by the disruption to supplies from Indonesia.

Indonesia’s coal and minerals director general, Sukhyar, said he regrets the action Newmont has taken and believes the government will seek to resolve it.

"It's not the end of the world ... automatically our renegotiation of CoW talks will temporarily be stopped," said Sukhyar, referring to the long-running contract renegotiations between the government and Newmont.

Newmont CEO Gary Goldberg and Freeport CEO Richard Adkerson have visited Indonesia in recent weeks in an attempt to negotiate a deal and restart copper exports in the country. 

Read the full press release by Newmont Mining Corporation here: http://newmont.q4web.com/files/2014/Press Releases/Press Release 1 Juli 2014 - Arbitration Filed Over Export Restrictions i _v001_e210p1.pdf