- POSTED: 27 Aug 2014 13:44
- UPDATED: 27 Aug 2014 13:45
US mining giant Newmont said it has withdrawn an international arbitration claim against Indonesia over a controversial mineral ore export ban after a breakthrough in talks with the government.
JAKARTA: US mining giant Newmont said it has withdrawn an international arbitration claim against Indonesia over a controversial mineral ore export ban after a breakthrough in talks with the government.
Last month, Newmont announced it was seeking a ruling at the Washington-based International Centre for Settlement of Investment Disputes to allow it to resume exports of copper from its huge mine in central Indonesia. But the company announced it was withdrawing the arbitration filing, saying it hoped the move would help it strike a deal with the government.
"The decision to discontinue and withdraw arbitration comes after commitments from senior government officials," said Newmont's Indonesian unit in a statement late Tuesday. It added the officials had pledged to open "formal negotiations" on a new agreement with Newmont that would allow it to resume work at its Batu Hijau mine, on condition the legal action was withdrawn.
Exports from Batu Hijau have been halted since January, when Southeast Asia's top economy introduced a ban on shipments of some unprocessed minerals, and higher taxes on others that can still be shipped out of the country. It is one of a raft of economic policies that critics have dubbed "resource nationalism", and which are pushed by politicians who argue that Indonesia is losing out by allowing foreign firms easy access to lucrative industries.
Copper concentrate, a partially processed product that is a major export for Newmont and its US peer Freeport-McMoRan, was exempt from the ban but the companies still faced paying the new, higher taxes on shipments. But Newmont refused, saying that the levies conflict with its original agreements to operate in Indonesia, and stopped exports.
In June, it ceased production at Batu Hijau after its stores filled up, declared "force majeure" to avoid penalties on missed deliveries, and sent thousands of workers on temporary leave. Freeport-McMoRan also halted exports from Indonesia after locking horns with the government over the new regulations. But it resumed shipments earlier in August after a six-month hiatus following a new agreement with officials.