PT Newmont regrets court closure order

PT Newmont regrets court closure order

JAKARTA (JP): PT Newmont Minahasa Raya, a unit of American
gold mining company Newmont Mining Corp., regretted on Monday the
injunction issued by a district court in North Sulawesi to
temporarily suspend its operations as long as its dispute with
the Minahasa regency remained in the courtroom.

"We are absolutely appalled by the court's decision," company
president Rick Ness said in a statement.

"At a time when Indonesia's international credibility is under
intense scrutiny, that a court would issue an order against a
foreign company investor clearly outside of any reasonable
interpretation of the law is simply mind-boggling. Obviously,
there are other considerations at work in this case," Ness added,
describing the court's decision as "spurious."

The Tondano court issued a temporary ruling on Saturday to bar
the company from pursuing its mining activities in Ratatok,
Minahasa, until the court completed the hearing of the suit filed
by the Minahasa regency against the company.

Regent Dolfie Tanor filed the suit last year in local court
against Newmont for the latter's refusal to pay C-class taxes to
the regency administration.

The C-class tax is levied for the exploitation of industrial
minerals and building materials, which are in the C category
according to the country's mining law.

The building materials and industrial minerals include stone,
gravel, sand, kaolin and zeolite.

Under the existing law, the right to license the development
of the commodities lies with the local administration and tax
proceeds go to the local administrations.

The regency argued that Newmont had violated the law by
refusing to pay the C-class taxes.

Newmont admitted that it extracted the C-class mining
materials, but it did so to enable it to access the gold ore
underground. The removed top soil is termed "overburden" in the
mining industry.

The company said it by no means used or sold the overburden
for commercial purposes. As such, it is not obliged to pay taxes
on them.

Ness noted the Minister of Mines and Energy in a letter dated
Dec. 17, 1999, to Minister of Home Affairs Surjadi Soedirdja
confirming that Newmont's position was correct.

Ness warned that the court's temporary ruling would have an
impact on the local economy as thousands of workers would lose
their jobs if the court's temporary ruling was approved by the
higher court.

He said Newmont would vigorously pursue all legal efforts to
prevent the provisional ruling from taking effect.

He said his company appealed the ruling, noting that the
ruling could not take effect if it was not approved by the higher
court.

"We'll go the Supreme Court if we have to," Ness said. "This
decision is clearly without legal basis, erodes the rule of law
and will constitute another blow to international confidence in
Indonesia."

Newmont Minahasa Raya is 80 percent owned by Denver-based
Newmont Mining Corporation and 20 percent owned by Tanjung
Sarapung and local businessman Yusuf Merukh. (jsk)