Indonesia’s government reiterated Thursday a threat to cancel Newmont Mining’s rights to the nation’s second- largest copper mine unless the Denver-based company and overseas partners sell a 10 percent stake by Feb. 22.
“We will cancel the contract” if Newmont and partners don’t give a written agreement by that date that the stake will be sold to local governments, Simon Sembiring, director general of coal and minerals, told reporters Thursday after meeting Newmont officials. “We are ready to face Newmont in arbitration.”
A cancellation of the mining accord may erode overseas investors’ confidence in the metal-rich Southeast Asian nation. Indonesia served Newmont with a so-called default notice Monday, saying its local unit hadn’t abided by the contract to sell the 10 percent stake according to an agreed divestment schedule.
“Newmont has to protect the interests of its shareholders and may exercise our rights” under the contract to seek arbitration, Russell Ball, Newmont’s chief financial officer, said after the meeting in Jakarta.
