Newmont Stuck Between Rock And A Hard Place

Posted on Apr 18, 2011

PT Newmont Nusa Tenggara stated that they will take the legal route to recover their losses if the planned Batu Hijau mine closure by the Sumbawa Barat, Nusa Tenggara Barat Regent will actually take place.

Newmont Nusa Tenggara General Manager of Operations David Lilley in a press release received on Monday said that they are very disappointed by the plans of West Sumbawa Regent Zulkifli Muhadli to force civil servants to illegally blockading Newmont’s operations.

“If the blockade plan goes ahead, we will take all precautions and laws as may be necessary to protect the operation and to demand compensation from the losses it may incurs” he said.

Haul Trucks at Batu Hijau

According to him, the task of a Regent is to enforce the law, ensuring public order and supporting economic development, and not to stop companies from operating.

“The actions of the Regent will only discourage investment in West Sumbawa and Indonesia in general as well as reducing the revenue that will be received by the district, provincial, and central (Government) from the Batu Hijau mine,” he added.

Lilley asked the government and the authorities to take peaceful action to prevent the sabotage plan to the company’s operations.

“We appreciate the support of the Nusa Tenggara Barat Governor and other elected officials that oppose the Regent efforts to block our employees and contractors to enter their workplace and stop the mining operation,” he said.

He continued, according to the contract work, it gets mandate on behalf of the Government of Indonesia to operate Batu Hijau safely and responsibly in order to deliver benefits to stakeholders, including governments and local communities.

“The decision to divest the shares is fully in the hands of central government rather than the company or the company foreign shareholders,” he said.

According to him, by offering a seven percent stake divestment, the shareholders of NNT has complied with the applicable provisions under the contract work signed between the Government of Indonesia and Newmont in 1986.

He also added, it has contributed significantly to national economic growth, provincial and district levels

According to the contract of work Newmont needs to divest it share up to 31 percent. 24 percent of the share was divested in the period of 1996 to 2009 and was purchased by local government company PT Multi Daerah Bersaing which is 25 percent owned by Sumbawa Barat government and 75 percent owned by private.

It is the last 7 percent that cause a rift between the local government and the Finance ministry since the Finance Ministry intended to acquire the share for the newly formed government owned investment arm Government Investment Central (Pusat Investasi Pemerintah). This has cause the Regent to be upset and threatened to close the mine if the central government went ahead with the plan.

Batu Hijau mine is an open pit mine with associated processing and support facilities. Our product is copper concentrate containing small quantities of gold which is transported to local and foreign smelters for further processing. The project is located in West Sumbawa regency, West Nusa Tenggara.


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