Newmont is facing inquiry
Uzbekistan begins criminal investigation; 900 workers on leave
Gargi Chakrabarty, Rocky Mountain News
Published August 12, 2006 at midnight
Denver's Newmont Mining Corp. on Friday said the government of Uzbekistan has started a criminal investigation into the company even as a $48 million tax dispute has disrupted gold production in the country.
Newmont did not specify in a Securities and Exchange Commission filing the criminal allegations against the Zarafshan-Newmont Joint Venture and its employees.
It conceded the situation has deteriorated and it has placed employees on leave during negotiations with government officials. Newmont employs about 900 at the Zarafshan-Newmont gold mine.
"At this point, the company no longer has day-to-day control over ZNJV's operations given these disputes and the threat of criminal charges against our personnel," Newmont spokesman Randy Engel said.
Newmont also said its Uzbekistan joint venture has filed an appeal in connection with earlier court rulings in favor of the country's tax authorities.
Uzbek officials refused to comment.
One of the world's largest gold producers, Newmont produced 123,000 ounces of gold in 2005 and 29,000 ounces for each of the two quarters this year at the gold mine.
The partnership has been fighting an order from an Uzbekistan economic court to pay about $48 million in taxes and penalties to resolve two claims dating to 2002.
Newmont had said earlier the government wasn't allowing gold to be shipped outside of Uzbekistan and that the tax authorities had seized some of the joint venture's gold and other assets. Uzbekistan authorities have continued to prevent the gold from being shipped out of the country, the filing said.
Late last month, Newmont said it would consider a sale of its 50 percent interest in the joint venture, worth about $94 million as of June 30.
Newmont Mining
NEM: NYSE
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chakrabartyg@RockyMountainNews.com or 303-954-2976.
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