Minister urges Newmont to provide input for new mining bill

Minister of Mineral Resources and Energy Purnomo Yusgiantoro called on PT Newmont Pacific Nusantara to provide input to the government in the drafting of the new mining bill.

"We expect Newmont to be able to provide input so that the bill can become bankable," he told reporters following a meeting with senior economic ministers

Purnomo was responding to earlier reports that Newmont Pacific Nusantara plans to conclude its Greenfield exploration (preliminary geological mining survey) in Indonesia due to the lack of clear legal framework and mining investment policy.

The plan is contained in a February 7 letter signed by company president Richard B. Ness to Purnomo.

"The primary reason for this decision is not the widely publicized political risk and security condition but stems from the basic fact that there is no clear legal framework and mining investment policy," Ness said.

He pointed out that the regulatory framework that was supposed to guide the implementation of regional autonomy with regards to mining investment did not exist.

He said that more troubling was the current draft of the new mining law was "non-bankable" nor were the current tax and royalty rates competitive in the world market place amid the current period of depressed metal prices.

"Without our bank's support and the ability to bring in new or additional debt financing under existing regulations, should we be successful in even finding a mineralized deposit, further green fields exploration efforts can not be justified to our shareholders," Ness said.

But Ness added that Newmont would continue to operate its existing mines within Indonesia. (R. Amoros)