NNT Takes Indonesia to Arbitration Court

Newmont Nusa Tenggara takes Indonesia government to arbitration court over mineral export ban dispute. (JG Photo/Safir Makki)

Jakarta. Talks between the government and Newmont Nusa Tenggara were brought to a halt after the latter decided to file an arbitration case against the former over export restriction, according to Indonesia’s director general for coal and mineral resources, R. Sukhyar.

Newmont Nusa Tenggara (NNT) and its majority shareholder, Dutch-owned  Nusa Tenggara Partnership (NTPBV ) announced on Tuesday that it had filed an international arbitration against the Indonesian government to seek relief from export restrictions the country imposed in January this year.

The unprecedented mineral ore  export ban ultimately pushed the miner to declare force majeure.

“The government’s imposition of new export conditions on NNT —  a new export duty and a new January 2017 ban on the export of copper concentrate — violates the Contract of Work [CoW] and the bilateral investment treaty between Indonesia and the Netherlands,” the company said in a statement.

“In the filing made to the International Center for the Settlement of Investment Disputes, NNT and NTPBV stated their intention to request an interim, injunctive relief [which would] allow NNT to resume exporting copper concentrate, so that Batu Hijau’s operations can be restarted,” the statement said.

Martiono Hadianto, president director of NNT, said the company has made efforts over the last six months to resolve the export issues through good faith commitments to support the country’s policy.

Newmont declared force majeure on Jun. 5 after it filled its warehouses with copper concentrate that could not be shipped anywhere else other than a copper smelting facility in East Java.

“NNT has been unable to convince the government that our CoW should guide [toward a] resolution of our differences.  As a result, NNT and its shareholders are left with no option but to seek relief through international arbitration to ensure our stakeholders’ jobs, rights and interests are protected.”

Sukhyar said he was disappointed in NNT’s decision as the issues of export restriction can still be resolved amicably.

“Of course talks will be stopped,” said Sukhyar on Tuesday, responding to questions from reporters on the impact of NNT’s decision on renegotiations with the government.

The government and PTNNT had been in talks to renegotiate new terms for the miner’s existing contract.

NNT used the bilateral investment treaty between Indonesia and the Netherlands to push for its case, which will be terminated starting on Jul. 1, 2015 .

In 2009, the Indonesian government won an arbitration case against NTT, which was centered on the miner’s rejection to divest its shares, as stated in the contract. The International Arbitration court ultimately ruled against. Gloves Are Off Talks between the coal mining giant and the Indonesian government break down

By Tito Summa Siahaan on 08:25 pm Jul 01, 2014