What is the main reason for PTNNT filing for international arbitration?

PTNNT has filed for international arbitration because it believes that new Indonesian government regulations imposing export conditions, duties, and a ban on copper concentrate exports violate the existing Contract of Work (CoW) signed with the Government of Indonesia and the bilateral investment treaty between Indonesia and the Netherlands.

What is the current operational status of the Batu Hijau mine?

The Batu Hijau mine is currently in a care and maintenance phase, meaning production has been halted due to the inability to export copper concentrate. The mine is incurring holding costs of approximately $20 to $25 million per month while efforts to resolve the export issues continue.

How will these export restrictions affect Newmont's previously provided production outlook?

Newmont has explicitly cautioned investors not to rely on its previously issued 2014-2016 production outlook. The restrictions mean that the projected production volumes from Batu Hijau will not be achieved, and the company has provided estimates for reduced attributable production for the remainder of 2014 and for 2015-2016, which will be impacted if exports cannot resume.

Are there any efforts to resolve this situation outside of the arbitration process?

Yes, PTNNT hopes to continue discussions with the Government of Indonesia to seek a resolution to the export issues outside of the formal arbitration process. They are also pursuing interim injunctive relief to allow for the resumption of exports under the existing CoW terms.

NEM/NEMCL 8-K SEC Disclosure

Summary

Newmont Mining Corporation (NEM) announced via an 8-K filing on July 1, 2014, that its Indonesian subsidiary, PT Newmont Nusa Tenggara (PTNNT), has filed for international arbitration against the Government of Indonesia. This action follows the halt of copper concentrate production at the Batu Hijau mine due to ongoing export restrictions imposed by the Indonesian government, which PTNNT alleges violate the existing Contract of Work (CoW) and a bilateral investment treaty. PTNNT is also seeking interim relief to resume exports under the current CoW terms. The Batu Hijau mine is currently in a care and maintenance phase, incurring significant holding costs of approximately $20 to $25 million per month. While PTNNT plans to continue selling existing copper concentrate from storage to Indonesia's sole smelter, PT Smelting, through the end of 2014, the smelter's capacity limitations prevent a return to normal operations. Investors are cautioned that Newmont's previously issued 2014-2016 production outlook, which assumed continued operations at Batu Hijau, will be negatively impacted by these export restrictions.

Key Highlights

1PT Newmont Nusa Tenggara (PTNNT), a subsidiary of Newmont Mining Corporation, has initiated international arbitration against the Government of Indonesia.
2The arbitration stems from Indonesian government regulations imposing new export conditions and duties on copper concentrate, which PTNNT claims violate the Contract of Work (CoW) and a bilateral investment treaty.
3Copper concentrate production at the significant Batu Hijau mine has been halted due to these export restrictions.
4The Batu Hijau mine is currently in a care and maintenance state, incurring substantial monthly holding costs of $20-25 million.
5PTNNT is seeking interim injunctive relief to allow the resumption of copper concentrate exports under existing CoW terms.
6Newmont has warned investors that its previously issued 2014-2016 production outlook will be negatively impacted by the ongoing export restrictions.
7Despite export restrictions, PTNNT will continue to sell copper concentrate from storage to PT Smelting through the end of 2014, but at limited volumes.

NEWMONT Corp /DE/ 8-K Report, Corporate Update (Jul 1, 2014)

Summary

Key Highlights

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