UPDATE: Newmont Mining Calls Off Arbitration with Indonesia

Newmont Mining Corp (NYSE:NEM) has called off its arbitration filing with the Indonesian government, signifying a resolution to the seven-month dispute is near.  

Company officials confirmed on Tuesday the US-based miner had reached a “constructive solution” over Indonesia’s new mining laws.

"The decision to discontinue and withdraw arbitration comes after commitments from senior government officials to open formal negotiations to conclude a Memorandum of Understanding (MoU) with PTNNT (PT Newmont Nusa Tenggara) upon cessation of the arbitration claim," the company said in a statement.

"Signing of a MoU with the government would be followed by the safe ramp-up of copper concentrate production and exports from Batu Hijau."

In June, Newmont Mining suspended operations at its Batu Hijau mine, declaring force majeure after an agreement over the controversial export tax could not be made. The company filed for arbitration in July.

The new mining law requires miners to pay higher royalties and develop mineral-processing facilities locally, along with other concessions.

According to Bloomberg, Newmont will partner with Freeport McMoRan Inc. (NYSE:FCX)’s Indonesian subsidiary and participate in supply agreements with companies to process ore locally.

The relationship between Newmont and Indonesia has visibly been tested by the dispute. Newmont and Freeport argued they should be excused from the tax as they account for 97 percent of Indonesia’s copper output.

Freeport announced last month it would resume copper exports at its Grasberg complex after striking a deal with Indonesia, agreeing to pay the export tax which was reduced to 7.5 percent. 

The government confirmed Newmont still needed to negotiate a MoU before exports could restart.