Slowly and Natural speed please
Newmont reportedly withdraws mining arbitration case against Indonesia
August 26, 2014
The stalemate between Indonesia and Newmont Mining Corp. over halted exports might be nearing an end. On Aug. 26, Reuters reported that Newmont Mining Corp had withdrawn its international arbitration filing against the Indonesian government.
Newmont's Indonesian CEO Martiono Hadianto said the mining giant had reached a "constructive solution" over new mining rules, and expects to resume production at its copper mine soon.
U.S.-based Newmont, which declared force majeure at its Batu Hijau copper mine in June and then filed for arbitration in July, is in dispute with the Indonesian government over an export tax imposed in January that the U.S.-based miner says conflicts with its mining contract.
"I heard Newmont's lawyer has withdrawn the case a few days ago," Indonesia's Industry Minister Mohamad Hidayat told Reuters, adding that investment board chief Mahendra Siregar had confirmed the news.
The government has yet to receive an official letter from Newmont, said Sukhyar, director-general of coal and minerals at the mining ministry, saying Newmont still needed to negotiate a Memorandum of Understanding before exports could be resumed.
Sukhyar added that Newmont had agreed to pay an export tax but further negotiations were needed over royalties.
Before the new export rules, Newmont forecast total copper in concentrate output would be between 110,000 and 125,000 tonnes from its Indonesian mine this year.
Freeport-McMoRan Inc's Indonesian unit resumed exports earlier this month after clinching a deal and signing an MoU with the government in July.
Both Freeport and Newmont, which account for 97 percent of Indonesia's copper output, had 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.
Freeport agreed to a much reduced export tax rate of 7.5 percent, which will fall further depending on progress in the construction of a domestic copper smelter.
