Minerals company takes arbitration gamble in Indonesia

The Indonesian subsidiary of US mining company Newmont is seeking an international arbitration against the Indonesian government even though lawyers say the challenge could backfire.

The Indonesian subsidiary of US mining company Newmont is seeking an international arbitration against the Indonesian government Pigprox

Newmont is fighting back against a ban on exports of minerals made by the government in January. Last month Newmont closed its gold and copper mine and told its 3,200 workers not to come to work. Relationships between the country and international investors are one of the subjects of the current presidential election campaign. 

Provocative step

Craig Tevendale, arbitration specialist at Herbert Smith Freehills, said: ‘Bringing a case against a host state can be seen as a provocative step, with far reaching repercussions. It’s usually done as a very last resort. Sometimes there’s a tipping point in terms of the destruction of value beyond which a board of directors have to say we owe a duty to shareholders to recoup this money.’ Source: Financial Times

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