By Linda Silaen
JAKARTA--Newmont Mining Corp. (NEM) said Tuesday it is filing
for international arbitration against the Indonesian government for
a mineral-export ban.
Newmont filed the case to the International Center for the
Settlement of Investment Disputes, seeking "interim, injunctive
relief" to resume export, it said in a statement.
The filing came after the company halted operations at its Batu
Hijau mine in Indonesia and declared force majeure last month,
arguing it could not meet its obligation to buyers after the
resource-rich nation banned ore exports in January and introduced
taxes on exports of mineral concentrates.
The government policies were intended to keep mineral-refining
processes within Southeast Asia's largest economy to gain higher
export proceeds from resources.
Denver-based Newmont and Phoenix-based Freeport-McMoRan Copper
& Gold Inc. (FCX), which control the two largest copper
producers in Indonesia, complained that the new taxes violated
their contracts with the government, which don't include a
provision for export taxes. The companies responded by selling to a
domestic smelter to recoup lost revenue and stockpiling
inventory.
Martiono Hadianto, chief executive of Newmont's Indonesian unit,
said that the company has been unable to convince the Indonesian
government to relax the export restrictions. As a result, Newmont
and its shareholders "are left with no option but to seek relief
through international arbitration to ensure our stakeholders' jobs,
rights, and interests are protected," he said.
"We want continued dialogue with the Government to lead to a
resolution outside of arbitration. In the meantime, we have an
obligation to protect the value of Batu Hijau and the thousands of
jobs it provides, as we are still unable to export copper
concentrate due to the regulations," Mr. Hadianto added.
Write to Linda Silaen at linda.silaen@wsj.com
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