Govt won't change deadlines on Newmont?s divestment: Report

The government is insisting copper and gold miner PT Newmont Nusa Tenggara (NNT), a Indonesian unit of U.S. mining giant Newmont Corp. to complete its planned divestment process by Feb. 22, threatening to terminate contract if it fails to meet the deadline, The Jakarta Post reported on Friday.

Simon Sembiring, director general for geology and mineral resources at the Energy and Mineral Resources Ministry, said Thursday the government had decided to stick to its deadline after a meeting with the company failed to reach an agreement.

?The decision to terminate the contract will rest with Energy and Mineral Resources Minister Purnomo Yusgiantoro, as the original contract of agreement was signed with the ministry?, Simon said.

Regarding the possible battle in an arbitration, Simon said that the government is prepared. He added the government was willing to help the company speed up the divestment process to help it meet the deadline.

?They have complained that the time we have given is too short? that they can?t afford to get the deal done within 11 days as they deem the local governments are not being cooperative. Therefore, we?re ready to help the company negotiate with local governments,? Simon said.

During Thursday?s meeting, NNT insisted it had already complied with all regulations and therefore refused to accept the default status.

Newmont Mining Corp. vice president and CFO Russell Bal, who represented the company at the meeting, said the government bad given the company little room to maneuver.

If no agreement can be reached the two remaining options will be either to seek an out-of-court settlement or to send the case to an arbitration tribunal as is required in the contract of work. The company has yet to decide which way it will take, he said.

Currently, NNT?s shareholders are Newmont Mining Corp (45 percent), local company PT Pukuafu Indah (PI) which controls 20 percent and a consortium led by?s Sumitomo (35 percent). (*)