Indonesia May Terminate Newmont Contract

Indonesia may terminate Newmont contract

JAKARTA, Feb. 25 (Xinhua) — A senior Indonesian official has told the government to terminate PT Newmont Nusa Tenggara (NTT)’s mining contract following a deadlock in Friday’s negotiations overits mandatory divestment program.

Simon Sembiring, director-general for geology and mineral resources of the Ministry of Energy and Mineral Resources, has told Minister Purnomo Yusgiantoro about the collapsed negotiation and recommended a revocation of the firm’s permit to operate gold and copper mine in Batu Hijau, West Nusa Tenggara.

“I have given the recommendation to the minister verbally and an official letter will soon follow,” he was quoted Monday by local newspaper The Jakarta Post as saying.

Simon said the recommendation was inevitable as the firm could not meet the Feb. 22 deadline to divest a 10 percent stake, as mandated under the so-called default letter sent to the company onFeb. 10.

The default status was given in the first place as the firm failed to sell the 10 percent stake by the end of 2007 as requiredunder the 1986 contract.

The contract requires the firm to gradually sell up to a 51 percent stake by 2010.

Blake M. Rhodes, vice president and chief counsel of Newmont Mining Corp., which holds 45 percent of NTT, said earlier Sunday despite Friday’s deadlock, Newmont was still upbeat about the settlement of the divestment process.

“We are hoping that tomorrow (Monday) we can have further discussions with whoever wants to speak to us, whether it is the minister, the director general, local governments and their representatives, in order to resolve the issue,” Blake told a media gathering.

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