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Newmont seeks international arbitration over Indonesia mining export curbs

 Newmont Mining Corp said on Tuesday it had filed for international arbitration against the Indonesian government over a near six month-old mining dispute that has halted the U.S.-based firm's copper concentrate exports from the country.

Newmont declared force majeure last month at its Batu Hijau copper mine in Indonesia. The firm, together with fellow miner Freeport-McMoRan Copper & Gold Inc, is in dispute with the government over an escalating export tax imposed in January that they say conflict with their mining contracts.


Global copper prices, currently near a four-month high of $7,028.50 per tonne, continue to be underpinned by the disruption to supplies from Indonesia, home to the world's No.5 copper mine that is owned by Freeport.


"PTNNT (PT Newmont Nusa Tenggara) 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," Martiono Hadianto, president director of PTNNT, Newmont's Indonesian operations, said in a statement.


"We want continued dialogue with the government to lead to a resolution outside of arbitration," he added. "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."


Newmont intends to request interim, injunctive relief to allow it to resume copper concentrate exports so that Batu Hijau operations can be restarted, according to the statement.


Indonesia's coal and minerals director general, Sukhyar, said while he had not yet read Newmont's letter notifying the government on its decision to seek arbitration, he regretted the miner had taken this action and that the government would seek to resolve it.


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


Newmont's decision to pursue international arbitration, despite a recent move by Indonesia to draw up a new mining export tax that will more than halve the base rate to be paid by miners, casts doubt on whether the export spat will be resolved before presidential elections on July 9.


Both Freeport and Newmont, which account for 97 percent of Indonesia's copper output, have previously argued they should be exempt from the tax, which kicks in at 25 percent and rises to 60 percent in the second half of 2016, before a total concentrate export ban in 2017.


The tax on concentrate exports is part of the outgoing government's drive to force miners to build smelters and processing plants in Southeast Asia's largest economy.


An attempt to broker a deal with foreign miners and restart copper concentrate exports was spearheaded by Indonesia's chief economics minister Chairul Tanjung last month and as a part of this, Newmont CEO Gary Goldberg and Freeport CEO Richard Adkerson visited Jakarta.



[Last update: 2014-07-03 12:01:29]

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