http://thejakartapost.com/news/2008/03/03/govt-newmont-turn-arbitration.html
Ika Krismantari and Agustina Wayansari , The Jakarta Post , Jakarta
Tue, 03/04/2008 1:32 AM
The government and Newmont Mining Corp. are seeking arbitration to settle a dispute revolving around the mandatory divestment program of the company's local unit.
The government is accusing the company of breach of contract for failing to meet the March 3 deadline to divest a 10 percent stake -- a charge denied by the company.
"We need to go to an arbitration tribunal because Newmont has never showed its good intention, and even act as if it is playing the government," Energy and Mineral Resources Minister Purnomo Yusgiantoro said Monday in a statement announcing the arbitration filling.
"Newmont has failed to honor its contract with Indonesia, so we have decided to file for arbitration," he said, adding that the government would seek to terminate the company's contract.
Under a 1986 contract, Newmont Mining and other foreign shareholders of PT Newmont Nusa Tenggara (NTT) are required to gradually sell a 49 percent stake in the company to a local party or parties.
Newmont owns 45 percent of NTT, which operates a copper mine in Batu Hijau. Japanese investors control 35 percent and Indonesian businesspeople hold the remainder.
By the end of 2007, according to the contract, the foreign shareholders were supposed to have sold 10 percent of their stake in NTT, which they failed to do.
The government issued a so-called default notice to Newmont early last month, while threatening to terminate its contract if it failed to meet the new divestment deadline of Feb. 22.
Newmont then failed to meet a new deadline of March 3, leaving the government no choice but to take the case to arbitration, Purnomo said.
He said the government was seeking arbitration because it wanted to maintain a positive investment climate by ensuring all disputes were settled according to the law.
According to an official at the energy ministry, Simon Sembiring, the arbitration proceedings would be held in Jakarta and would follow the rules of the United Nations Commission on International Trade Law.
The government will be represented by the Attorney General's Office.
The firm will be allowed to operate as normal during the proceedings until the panel delivers a ruling, Purnomo said.
Newmont said it and its foreign shareholders wanted to preserve their rights and to prove they did not violate the contract.
Newmont Mining senior vice president Russell Ball confirmed the arbitration proceedings would be held in Jakarta. He said there would likely be three arbitrators, one selected by the government, one by Newmont and one selected jointly by the two sides. (*)
Ika Krismantari and Agustina Wayansari , The Jakarta Post , Jakarta
Tue, 03/04/2008 1:32 AM
The government and Newmont Mining Corp. are seeking arbitration to settle a dispute revolving around the mandatory divestment program of the company's local unit.
The government is accusing the company of breach of contract for failing to meet the March 3 deadline to divest a 10 percent stake -- a charge denied by the company.
"We need to go to an arbitration tribunal because Newmont has never showed its good intention, and even act as if it is playing the government," Energy and Mineral Resources Minister Purnomo Yusgiantoro said Monday in a statement announcing the arbitration filling.
"Newmont has failed to honor its contract with Indonesia, so we have decided to file for arbitration," he said, adding that the government would seek to terminate the company's contract.
Under a 1986 contract, Newmont Mining and other foreign shareholders of PT Newmont Nusa Tenggara (NTT) are required to gradually sell a 49 percent stake in the company to a local party or parties.
Newmont owns 45 percent of NTT, which operates a copper mine in Batu Hijau. Japanese investors control 35 percent and Indonesian businesspeople hold the remainder.
By the end of 2007, according to the contract, the foreign shareholders were supposed to have sold 10 percent of their stake in NTT, which they failed to do.
The government issued a so-called default notice to Newmont early last month, while threatening to terminate its contract if it failed to meet the new divestment deadline of Feb. 22.
Newmont then failed to meet a new deadline of March 3, leaving the government no choice but to take the case to arbitration, Purnomo said.
He said the government was seeking arbitration because it wanted to maintain a positive investment climate by ensuring all disputes were settled according to the law.
According to an official at the energy ministry, Simon Sembiring, the arbitration proceedings would be held in Jakarta and would follow the rules of the United Nations Commission on International Trade Law.
The government will be represented by the Attorney General's Office.
The firm will be allowed to operate as normal during the proceedings until the panel delivers a ruling, Purnomo said.
Newmont said it and its foreign shareholders wanted to preserve their rights and to prove they did not violate the contract.
Newmont Mining senior vice president Russell Ball confirmed the arbitration proceedings would be held in Jakarta. He said there would likely be three arbitrators, one selected by the government, one by Newmont and one selected jointly by the two sides. (*)
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