Independent judge for Newmont arbitration named

The Indonesian government and the American mining giant Newmont Corporation have named an independent judge for the arbitration hearing of their disputes over the company?s mandatory divestment, Media Indonesia reported on Monday.

Director General of Mineral, Coal and Geothermal Resources at the Ministry of Energy and Mineral Resources Simon Sembiring said in Jakarta last week that the independent for the arbitration hearing of Newmont Nusa Tenggara (NNT) was based in Switzerland.

But he said he forgot his name.

Meanwhile, NNT spokesman Rubi W. Purnomo confirmed the appointment of the third judge, saying that the company and the government had approved the appointment.

Both the government and Newmont have appointed their respective judges for the arbitration. The government has named Sornajah from the National University of Singapore while Newmont had appointed an American, Stephen M. Schwebel, the former president of the international court.

The arbitration hearing which will be held in Jakarta.

The government and NNT have been at odds over the mandatory divestment of the company?s shares. The government has accused the American mining giant of intentionally delaying the divestment, the charge which has been strongly opposed by the company.

Both the government and Newmont later agreed to settle their difference through an international arbitration.

Under the article 24 of the Contract of Work, NNT signed with the government in 1986, the company?s foreign shareholders should divest at least 51 percent of their stake after 10 years of the company?s commercial production. Newmont needs only to divest of 31 percent of its shares because its local partner PT Pukuafu Indah has already held 20 percent.

Three percent of the stake should be divested in 2006, seven percent in 2007 and another seven percent respectively in 2008, 2009 and 2010. The fact that the shares are still held by the bank as the collaterals of the company?s US$1 billion loan has also hampered the divestment process of the 10 percent shares for 2006 and 2007.

Meanwhile, Republika reported Monday that the ministry of energy has again threatened to issue a default against Newmont for continuing to put its shares as loan collateral especially the seven percent that have to be divested in 2008.

?Newmont should not offer shares which are still held by a bank. The company should abide by the Indonesian law,? Simon was quoted as saying. (*)