Government welcomes withdrawal of Newmont?s lawsuit

Senior government officials welcome the move by mining giant PT Newmont Nusa Tenggara (PTNNT) to withdraw its international arbitration, saying it would reopen negotiation talks that would eventually lead to the company resuming export activities.

Minister of Finance M. Chatib Basri was quoted by Koran Tempo Thursday as saying that the arbitration claim withdrawal by Newmont is a ?progress.?

Meanwhile, Minister of Industry MS Hidayat was quoted by Bisnis Indonesia daily Thursday as saying that the withdrawal would reopen negotiation talks between the government and the company regarding the latter?s obligation to build domestic smelter and amendment of mining contract, two pre-conditions for the company to be able to resume export.

Hidayat said that the negotiation with Newmont would not be difficult to conclude as the government has concluded talks with mining giant PT Freeport Indonesia regarding contract renegotiation and domestic smelter obligation. Freeport has agreed to build a smelter in Gresik, East Java. Hidayat said that Newmont had previously agreed to participate in the Freeport smelter project.

PTNNT announced on Tuesday that the company and Nusa Tenggara Partnership BV (NTPBV), PTNNT?s majority shareholder, requested discontinuance and withdrawal of the arbitration claim filed with the International Centre for Settlement of Investment Disputes(ICSID) relating to the export restrictions that halted production at the Batu Hijau copper and gold mine in Sumbawa Barat.

The decision to discontinue and withdraw arbitration comes after commitments from senior governmental officials to open formal negotiations to conclude a Memorandum of Understanding (MoU) with PTNNT upon cessation of the arbitration claim. Signing of a MoU with the government would be followed by the safe ramp-up of copper concentrate production and exports from Batu Hijau.

?PTNNT remains committed to its long-term partnership with Indonesia and seeks to demonstrate its support for the Government?s policies, the Indonesian people, and the ongoing responsible development of the country?s natural resources,? the firm said.

PTNNT and NTPBV, a Dutch firm, announced on July 1 the filing of international arbitration against the Government of Indonesia to seek relief from export restrictions that have halted production at the Batu Hijau mine and inflicted hardship and economic loss on PTNNT?s employees, contractors, and other stakeholders. (*)