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Newmont deadline extended into March

Rocky Mountain News

Published February 25, 2008 at 8:16 a.m.
Updated February 25, 2008 at 9:33 a.m.

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Newmont Mining Corp. said today it has received an extension until March 3 to resolve a dispute with the Indonesian government over the divestment of part of its stake in an Indonesian gold and copper mine.

The two sides have been at odds over the government’s contention that a subsidiary of the giant gold producer breached its contract by failing to divest a 10 percent stake in the mine within the specified time period. Newmont has denied the allegation.

Newmont has a 45 percent stake, and a local unit of Japan’s Sumitomo Corp. has a 35 percent share in PT Newmont Nusa Tenggara, a subsidiary that owns the Batu Hijau mine on the island of Sumbawa, about 950 miles east of Jakarta.

Under terms of a 1986 contract with Indonesia, the subsidiary is required to sell 51 percent to the Indonesian government or nationals by March 31, 2010.

In a statement issued today, Newmont said the government agreed to extend the deadline from last Friday to March 3.

“If an agreement to sell shares in PTNNT (the subsidiary) to the local governments cannot be reached by this date, or a further extension of the deadline is not granted, PTNNT may be forced to protect its interests by resorting to conciliation or arbitration,” the company said.

Newmont shares fell 84 cents to $49.21 in morning trading today.

Last year, Indonesian courts cleared Newmont unit PT Newmont Minahasa Raya and company executive Richard Ness of charges that another mine run by the company on Sulawesi island had polluted local waters with mercury and poisoned villagers.

Newmont also has mining operations in the United States, Canada, South America, Australia, Ghana and Mexico.