Verification team divided over Newmont tax dispute

A joint verification team has ended their investigation over the C-class building materials excavated by PT Newmont Minahasa Raya but the team's members are still divided over the investigation results, MinergyNews.Com reported.

The team established by the ministry of mines and energy in order to end the prolonged tax dispute between the mining company and the Minahasa regency concluded that Newmont had to pay Rp 500 million in C-class tax for using part of the building materials such as sand and gravel as aggregate.

But sources said that representatives of the local government in the joint team, which also included executives of Newmont, opposed the result.

The regency last year filed a lawsuit against Newmont in the Tondano District Court following Newmont's refusal to pay C-class taxes, a mining tax imposed by the local government on materials such as sand and gravel. The regency won the case and demanded Newmont to pay Rp 61 billion (US$8.4 million) in overdue taxes.

The mining company, which is 80 percent owned by Newmont Mining Corp of the United States, rejected the tax payment because the C-class tax was not included in its contract of work (COW). It admitted removing overburden containing sand, gravel and stones, but it did so to access the gold ore beneath and did not make commercial use of the removed material.

The mining company appealed to the high court in Manado but recent reports said that the high court ruled against the company and upheld the Tondano court's decision.

The director for mining operation at the ministry of mines and energy Simon F. Sembiring confirmed that the team remained divided over the investigation results. He added that the head of the joint verification team, who is the head of the mining office in North Sulawesi, would soon discuss the team's conclusion with the Minahasa regent. (*)