"Whereas the government has sought to find a solution to sort out the problem including possible renegotiation. The governments policy is not directed toward Newmont in particular, but also all mining companies operating in Indonesia," Muh Amin said here on Wednesday.
He said it is regrettable that Newmont has to go to international arbitration court as there are still many ways open for settling the dispute.
An Indonesian law announced in 2009 came into force in mid January 2014 banning exports of unprocessed minerals.
The law is expected to force mineral producers to build their smelters to process their concentrates in the country.
PT Newmont Nusa Tenggara (NNT) is a subsidiary of US based Newmont Mining Corp, which together with another US mining giant Freeport Indonesia account for more than 95 percent of the countrys copper production.
NNT and its majority shareholder Nusa Tenggara Partnership BV of the Netherlands brought the case to the International Center for the Settlement of Investment Disputes.
Amin expressed fear that the international arbitration court would favor Newmont saying Newmont could be juridically in a stronger position as there is no clause about smelter in the mining contract.
"It would be an embarrassing to the government," he said.
The government has given a reprieve to both Freeport and NNT. They are allowed to continue export of copper concentrate until 2017 with certain export taxes and that they are to pay a guarantee fund that they would build their smelters to be operational in 2017.
No such relief was offered to producers of other minerals like nickel and bauxite .
State-owned nickel and bauxite miner PT Aneka Tambang, has lodged protest against the government .
Amin admitted the impact of the regulation banning exports of mineral concentrates is bad for the province .
"Thousands of workers have lost their jobs as NNT could no longer operate normally," he said.
President Director of PT NNT Martiono Hadianto said the export ban since January 12, 2014 forced the company to stop the process of production at Batu Hijau mine causing great losses and difficulties to the contractors, workers and other stakeholders.
Martiono said the export ban is not in line with the contract of work (KK) and bilateral investment agreement between Indonesia and the Netherland.
"The shareholders have no choice but to seek settlement through international arbitration court to ensure that work, right and interest of the company are protected," he said.
However, the company still wants to continue dialogs with the government to have out of court settlement, he said.
He said the copper and gold mine of Batu Hijau is now in the process of maintenance.
Newmont still sells around 58,400 tons of copper concentrate PT Smelting in Gresik, Indonesia until end of 2014.(*)
Editor: Heru Purwanto
Copyright © ANTARA 2014
