Government regrets Newmont's gold mine closure
Tuesday, April 11 2000 - 04:00 AM WIB
Minister of Mines and Energy Susilo Bambang Yudhoyono said the central government would not intervene in the Tondano court proceedings despite its order to shut down Newmont Minahasa Raya's (NMR) gold mining, Republika daily reported on Tuesday.
"That's is the full authority of the court but we will welcome any move from the local government and Newmont management to settle the case out of the court," the minister told a press briefing on Monday.
Although, the government's would not intervene in the court process, the minister said that his office would facilitate any moves from the Minahasa government and the mining company to settle the dispute out of the court.
The District Court of Tondano in the Minahasa regency, North Sulawesi ordered on Saturday the closure of PT Newmont Minahasa Raya's (NMR) gold mine in Rotatok by April 16, 2000 in favor of the regional government's claim that the company did not pay the local tax.
The closure order relates to a disputed claim by the Minahasa Regency, North Sulawesi that Newmont Minahasa Raya owes taxes on overburden, the waste rock and soil removed in order to access the gold-bearing ore.
The mining company is 80 percent owned by Newmont Mining Corporation, based in Denver, Colorado, the United States.
Newmont's the Contract of Work with the government of Indonesia excludes taxes on overburden, a position supported by the Indonesian Department of Mines and Energy (DOME).
On January 22 the Tondano District Court granted the regional government's request for a provisional judgment to shut down the mine. On March 6, the Manado High Court affirmed the decision, permitting the shutdown order that the Tondano court issued.
Meanwhile Director General of General Mining Surna Tjahja Djajadiningrat said that the Tondano court's decision sent a negative signal to foreign investors, Bisnis Indonesia reported on Monday.
"The U.S. government has expressed its concern over the court's order. In addition, two senior officials of the American embassy here have met the minister to express their regret," he said, adding that the court's decision could become a bad precedent for other foreign mining companies in the country.
He blamed the regent of Minahasa on the court's decision. The regent, which brought the case to the court, should not think only for the interest of the local people but also the interest of the whole people in the country.
In fact, he said that the presence of the company in the province was not that bad, it had pledged to provide US$30,000 a year in community development to improve the welfare of the local people, especially those living near the mine site. "In addition, the company has also agreed to provide $1.5 million in five years," he added. (*)