Newmont, Minahasa regency reached out-of-the court settlement
Thursday, April 20 2000 - 03:00 AM WIB
The local government of the Minahasa regency, North Sulawesi and PT Newmont Minahasa Raya (NMR) have reached an out-of-the court agreement on a tax dispute, which has threatened the gold mine operator to shut down its gold mine in the province, Kompas reported.
Director general for general mining at the Ministry of Mines and Energy Surna Tjahya Djayadiningrat said under the agreement reached in a meeting in Jakarta on Wednesday, 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 president Richard Ness welcomed the agreement, saying the company and the local government had come to very amicable terms of settlement, The Jakarta Post reported.
"We are very happy with the fact that the government has honored our contract," he said.
Meanwhile Minahasa regent Dolfie Tanor said that he would the charge against the company either on Saturday or next week.
He denied that his decision was made due to pressure from the government.
The regency filed the suit against the company last year in the local court for its failure to pay the local tax on the overburden, the waste material removed from the ground in order to access mineral deposits.
Newmont refused to pay the tax because it said that the overburden had no commercial value. 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.
The court earlier demanded the gold mine operator to pay Rp 19 billion in overdue tax (about 2.4 million).
The local court earlier issued a provisional ruling ordering the company to close the gold mine until the court came with its final verdict. But the Supreme Court stepped in and annulled the local court's decision. (*)