Newmont loses appeal at Manado court

PT Newmont Minahasa Raya, a gold miner, has lost its appeal to a provincial court in Manado, North Sulawesi against a closure order by a district court related to a tax dispute, the company said Monday in a statement.

In a possible setback to foreign investment in Indonesia the Manado court has confirmed the district court's decision to order the closure of the mine operated by Newmont Minahasa, which is 80%-owned by Newmont Mining Corp. (NEM) of the U.S.

Newmont Minahasa is waiting to receive written confirmation of the decision before shutting down its operations, which produces around 340 kg of gold annually.

"We regret the decision made by the Manado court," the statement said.

The Minahasa administration filed suit against the company late last year for not paying taxes for the materials it digged out to access its gold deposits and demanded the company's mining operations be closed down.

The local government won the case. Newmont then appealed the court's decision saying that the overburden or the materials it digged out during the exploration activities had no commercial value and that they were not subject to tax payment. (*)