West Nusa Tenggara, West Sumbawa to take legal action against Newmont
Tuesday, February 26 2008 - 02:25 AM WIB
Governor Lalu Serinata said on Monday that the West Nusa Tenggara provincial administration had sent a letter the Attorney General's office and the Ministry of Energy and Mineral Resources on the planned lawsuit.
?We sent two letters on Monday to the Minister of Energy and Mineral Resources and the Attorney General's office respectively. We asked the Attorney General's office to become the (provincial) government's legal representative and take a legal action against Newmont for cheating us," the governor said.
The West Sumbawa regency administration also mulls taking the same action. "There are now enough reasons for the government to terminate NNT's contract. They have lied on the status of its shares," Regent Zulkifli Muhadli was quoted by Kontan as saying.
Meanwhile, Director General of Mineral, Coal and Geothermal Resources Simon F. Sembiring called on NNT to settle its debts to the banks that have provided it with loans.
?Newmont must settle their debts with the two banks in Japan and Germany before it can continue with the the divestment plan,? Simon told The Jakarta Post.
The company has used its shares as collateral for $1 billion worth of loans from the Export Import Bank of Japan and Kreditanstalt fur Wiederaufbau in Germany, which makes it impossible for the company to divest 10 percent of its shares to local governments, as demanded by the 1986 contract.
?Newmont admitted their inconsistencies in complying with the contract,? Simon said. ?Right now they are ready and willing, but they are not able to continue with the divestment.?
Head of the Investment Coordinating Board (BPKM) Muhammad Lutfi said NNT needed to provide approval from its senior lenders before it could continue with anything else.
?Without approval, they won?t be able to do anything with the stake, and the provincial government can?t buy it,? Lutfi said.
NNT spokesperson Rubi W. Purnomo told a press conference the company had pushed for a meeting with the government since early Monday morning. ?The meeting was finally held this afternoon, attended by Director General Simon Sembiring," he said
Newmont Corp. in a statement on Monday that it had requested and received an extension of the Government-imposed deadline to complete agreements in principle to divest 10 percent of NNT.
Newmont Corp. has acknowledged that Newmont Indonesia Limited (NIL), Nusa Tenggara Mining Corporation (NTMC) and their local partner PT Pukuafu Indah have put their entire shares in NNT as collateral for the company's US$1 billion loan to a number of foreign banks.
Newmont?s Chief Counsel Blake Rhodes said that using their shares as the collateral for the loans, which were obtained several years ago, was not against the Indonesian law.
In fact, the Ministry of Energy and Mineral Resources issued a letter on Oct. 30, 1997 approving the use of the laon as collateral, he said in statement on Sunday.
NNT, which obtained its contract of works to operate a copper and gold mine in Batu Hijau, West Nusa Tenggara in 1986, is required to divest up to 51 percent of its shares to the government or Indonesian companies by 2010. By the end of 2007, the company should divest 10 percent of its shares as part of the mandatory divestment program.
Currently, NNT?s shareholders are Newmont Mining Corp (45 percent), local company PT Pukuafu Indah (PI) which controls 20 percent and a consortium led by?s Sumitomo (35 percent). (*)