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Indonesia warns Newmont to bear serious risks of its lawsuit on arbitration

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(Globalpost/GlobalPost)

Indonesia warns Newmont to bear serious risks of its lawsuit on arbitration

JAKARTA, July 7 (Xinhua) -- The Indonesian government on Monday gave a warning to the PT Newmont Nusa Tenggara (PNTT), an Indonesian subsidiary of U.S. giant mining firm Newmont Corp., to lift its arbitration suit against the government policy to curb export of mineral ores, otherwise it will face a serious impact of its legal action, a minister said here.

Economic Chief Minister Chairul Tanjung said that the government still gave an opportunity to the company to return to renegotiation table to settle the dispute with the government on the law on mineral and coal, and the government regulation (PP) number 9 on royalty.

Last week, PNTT revealed that it had filed a lawsuit to the international arbitration against the Indonesian government export ban on Jan. 12 that bars shipment of mineral ores to overseas.

Minister Chairul said that the government stance and offer would be delivered to PNTT on Monday afternoon.

"But if Newmont not to lift the lawsuit, the government would take a legal action with high firmness that could bring a serious impact on Newmont itself," he told a press conference at his office.

"Therefore we remind giving an opportunity to Newmont, once more, to come back to renegotiation to address the disputes," said Chairul.

"In principle, the government wants to protect investors, onshore and offshore investors, including Newmont," he added.

Indonesian Industry Ministry MS Hidayat revealed that top leader of PNTT Martiono would be summoned by the energy and mineral resources ministry (ESDM) on Monday.

"Today (Monday) Martiono is invited by ESDM, if there is a prospect to return to renegotiation, we will put priority on it," he said at the coordinating ministry for economy on Monday.

Should there will be the prospect, Hidayat said that the upcoming process would take place in the parliament.

Minister Hidayat disclosed that should the PNTT continue its legal process, the firm may face the worst impact of its action, the closure of its mine in East Nusa Tenggara.

The government curbs the export of mineral ores in a bid to extract more revenue on mining sector through the added-value process in domestic.

The slap on the ban has halted shipment of coppers from Newmont mines in Indonesia, which recently the firm declared a force majeure, and PT Freeport Indonesia, a subsidiary of U.S. mining giant Freeport McMorant Gold Copper Corp..

But, Freeport did not take the suit to arbitration and already reached agreement on all items of renegotiation with the government, Minister Chairul disclosed.

The government has barred export of mineral ores of nickel, bauxite, tin, chromium, gold and silver as they don't have intermediate products, but still allowed the exports of copper, lead, zinc, iron and manganese by 2017. However, the miners are subject to punitive export tax from 25 percent to 60 percent.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/140707/indonesia-warns-newmont-bear-serious-risks-its-lawsuit-arbit