Minahasa claims victory over Newmont
Monday, May 15 2000 - 04:45 AM WIB
The administration of the Minahasa regency in North Sulawesi has claimed a victory in its legal fight against the United States-based mining giant Newmont Corporation, which operates a gold mining in the Ratatok village in the regency, Kompas reported on Monday.
Jerry Patilima, the head of the legal bureau at the regency, said the regency's decision to take Newmont to court was a right step despite the fact that the move was opposed by elite political bureaucracies such as the Ministry of Mines and Energy and the House of Representatives (DPR) in Jakarta.
If the Minahasa regency did not bring the case to the court, Newmont Minahasa Raya, which operates the gold mine, would have never paid the local tax, which is imposed on the C-class mineral resources such as sand, rocks and other mineral contents.
The local government asked the mining company to pay local tax worth Rp 61.5 billion for the C-class mineral resources excavated by Newmont. But the American company rejected the payment saying that the C class mineral resources, which wee excavated by the company was just an overburden, which had no commercial value.
The local government then brought the case to the local court. After months of hearings, the court ordered the closure of the company but the order was foiled by the Supreme Court decision that closure order should be suspended.
In early April, PT Newmont Minahasa Raya and the Minahasa reached an out-of-court agreement after Newmont agreed to pay US$500,000 in overdue taxes plus some "compensations" to the Minahasa regency administration.
The regency, in return, dropped its lawsuit against the subsidiary of American mining firm Newmont Mining Corporation.
The amount was much smaller than those demanded by the Minahasa government.
Under the agreement, Newmont also agreed to contribute $1.5 million to establish a foundation to promote the welfare of the local people, which will be jointly the regency, the company and the representatives of the local people.
The company, he said, would also spend an additional $1 million per year for a period of three years for community development programs. (*)