Newmont Minahasa pays Rp 3.7 billion in local tax

PT Newmont Minahasa Raya (NMR) has paid Rp 3.7 billion (us$=Rp 7,800) in a local tax to the Minahasa regency as part of the deal in its legal dispute with the regency administration recently.

In its press statement carried by Mandiri online news service, the mining company's president Richard Ness said that the money was directly transferred to the bank account of the local government.

The tax payment was made after the Minahasa administration in North Sulawesi and Newmont reached an out-of-the court agreement last month on a tax dispute, which has threatened the gold mine operator to shut down its gold mine in the province.

Under the agreement, Newmont agreed to pay US$500,000 in overdue taxes plus some other compensation. The local government, on the other hand, agreed to drop the legal suit against the gold mine company, which is 80 percent owned by the United States-based Newmont Corporation, he said.

In addition, Newmont also agreed to provide US$1.5 million to finance the establishment of a foundation, which will work to promote the welfare of the local people, he said. The gold mine operator also agreed to provide additional $1 million a year in thee years to finance community development program.

Newmont previously refused to pay the tax, which is imposed by the local government on the C-category mineral resources such sand, stones, soils and other overburden materials. But the local government insisted that a portion of the overburden was taxable because they were used by the company to build roads and buildings. In addition, Newmont said that the tax was not included in the contract. (*)