Regent of Minahasa to decide Newmont tax dispute

Director General of General Mining at the Ministry of Mines and Energy Simon F. Sembiring said that the regent of Minahasa will decide the fate of PT Newmont Minahasa Raya himself after the joint verification team failed to determine the amount of the C-class tax which should be paid by the mining company, Bisnis Indonesia reported on Thursday.

"We would soon meet the regent of Minahasa to directly talk the matter," Simon told journalists at a sideline of a seminar on mining, oil, gal and electricity on Wednesday.

The joint verification team comprising of local government officials and Newmont executives had ended their assessment on the size of the C-class materials such as sand, rock and gravel excavated by the mining company in its production activities. But they were divided on the amount of the tax that the company should pay to the local government, he added.

The regency last year filed a lawsuit against Newmont in the Tondano District Court following Newmont's refusal to pay C-class taxes, a mining tax imposed by the local government on materials such as sand and gravel. While the court's examination of the case is in progress, the joint verification team was formed at the request of Minister of Mines Energy Susilo Bambang Yudhoyono to settle the dispute out of court.

The mining company, which is 80 percent owned by Newmont Mining Corp of the United States, admitted removing overburden containing sand, gravel and stones to access the gold deposit but it rejected the tax payment because it claimed the C-class tax was not included in its contract of work (COW).

The Manado high court was reportedly to have ruled in favor of the local government but Sembiring said that the final decision would be made by the regent of Minahasa. (*)