Supreme Court urged to intervene in Newmont row

Supreme Court urged to intervene in Newmont row

JAKARTA (JP): The Ministry of Mining and Energy will urge the
Supreme Court to provide fair treatment on the tax dispute
between PT Newmont Minahasa Raya and the Minahasa regency in
North Sulawesi.

Secretary-General of the Ministry of Mines and Energy Djoko
Darmono said here on Friday he would meet one of the Attorney
General's deputies on Tuesday to ensure a fair and objective
court decision on the case.

"We can't allow investors to think there is no legal
certainty," Djoko said.

The North Sulawesi Tondano District Court issued a ruling last
Saturday barring Newmont, a unit of American gold mining company
Newmont Mining Corp., from temporarily conducting mining
activities until a hearing of the regency's suit against the
company was completed.

The ruling followed charges by the Minahasa administration
accusing the gold mining company of violating the regency's
regulations on tax payments.

The Minahasa regency accused Newmont of refusing to pay C-
class taxes, levied for the exploitation of industrial, mining
and building materials.

Newmont, which later appealed to the higher court, admitted it
extracted C-class materials such as sand, gravel and stones but
it did so to access the gold ore underground, not for commercial
purposes.

"In our view, Newmont has not made commercial gains from the
materials and the company is not subject to such taxes," Djoko
said.

He said Newmont had asked the Supreme Court to direct the
higher court toward an objective decision.

"We don't interfere with court proceedings, nor do we lobby
the Supreme Court, we just provide it with information," he said.

Djoko, however, warned that closing down Newmont would exempt
the gold mining company from the obligation of paying high
reclamation costs after the gold reserves had been depleted.

"Newmont's gold reserves will last for only about two to three
more years; they may not even care if we close down their mining
site," he said.

Nevertheless, the company's president, Rick Ness, said on
Monday he was appalled by the court's decision, citing the ruling
as "clearly outside of any reasonable interpretation."

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

Minahasa Regent Dolfi Tanor filed the suit against Newmont
last year in a local court.

Under the existing law, the right to license the exploitation
of the C-class materials lies with the local administration, with
tax proceeds going to the region's coffer.

Newmont Minahasa Raya is 80 percent owned by the Denver-based
Newmont Mining Corporation and 20 percent owned by Tanjung
Sarapung and local businessman Yusuf Merukh. (03)