1.0.0.3falseCommitments and Contingenciesfalse1$falsefalseUSDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli020nem_CommitmentsAndContingenciesAbstractnemfalsenadurationstringCommitments and Contingenciesfalsefalsefalsefalsefalsetruefalsefalsefalse1falsefalse00falsefalseCommitments and Contingenciesfalse31us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaaptruenadurationstringNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<b><font style="font-family: Arial, Helvetica">NOTE 33  </font></b>
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<b><font style="font-family: Arial, Helvetica">COMMITMENTS AND
CONTINGENCIES</font></b>
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<b><i><font style="font-family: Arial, Helvetica">General</font></i></b>
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The Company follows ASC guidance in determining its accruals and
disclosures with respect to loss contingencies. Accordingly,
estimated losses from loss contingencies are accrued by a charge
to income when information available prior to issuance of the
financial statements indicates that it is probable (greater than
a 75% probability) that a liability could be incurred and the
amount of the loss can be reasonably estimated. Legal expenses
associated with the contingency are expensed as incurred. If a
loss contingency is not probable or reasonably estimable,
disclosure of the loss contingency is made in the financial
statements when it is at least reasonably possible that a
material loss could be incurred.
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<b><i><font style="font-family: Arial, Helvetica">Operating
Segments</font></i></b>
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The Company’s operating segments are identified in
Note 31. Except as noted in this paragraph, all of the
Company’s commitments and contingencies specifically
described in this Note 33 relate to the Corporate and Other
reportable segment. The Nevada Operations matters under Newmont
USA Limited relate to the North America reportable segment. The
PT Newmont Minahasa Raya matters relate to the Asia Pacific
reportable segment. The Yanacocha matters relate to the South
America reportable segment. The Newmont Yandal Operations Pty
Limited matter relates to the Asia Pacific reportable segment.
The PTNNT matters relate to the Asia Pacific reportable segment.
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<b><i><font style="font-family: Arial, Helvetica">Environmental
Matters</font></i></b>
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The Company’s mining and exploration activities are subject
to various laws and regulations governing the protection of the
environment. These laws and regulations are continually changing
and are generally becoming more restrictive. The Company
conducts its operations so as to protect the public health and
environment and believes its operations are in compliance with
applicable laws and regulations in all material respects. The
Company has made, and expects to make in the future,
expenditures to comply with such laws and regulations, but
cannot predict the full amount of such future expenditures.
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Estimated future reclamation costs are based principally on
legal and regulatory requirements. At December 31, 2009 and
2008, $698 and $594, respectively, were accrued for reclamation
costs relating to mineral properties in accordance with asset
retirement obligation accounting guidance. The current portions
of $36 and $43 at December 31, 2009 and 2008, respectively,
are included in <i>Other current liabilities</i>.
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In addition, the Company is involved in several matters
concerning environmental obligations associated with former
mining activities. Generally, these matters concern developing
and implementing remediation plans at the various sites
involved. The Company believes that the related environmental
obligations associated with these sites are similar in nature
with respect to the development of remediation plans, their risk
profile and the compliance required to meet general
environmental standards. Based upon the Company’s best
estimate of its liability for these matters, $161 and $163 were
accrued for such obligations at December 31, 2009 and 2008,
respectively. These amounts are included in <i>Other current
liabilities </i>and <i>Reclamation and remediation
liabilities</i>. Depending upon the ultimate resolution of these
matters, the Company believes that it is reasonably possible
that the liability for these matters could be as much as 148%
greater or 3% lower than the amount accrued at December 31,
2009. The amounts accrued for these matters are reviewed
periodically based upon facts and circumstances available at the
time. Changes in estimates are recorded in <i>Other expense, net
</i>in the period estimates are revised.
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Details about certain of the more significant matters involved
are discussed below.
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<i><font style="font-family: Arial, Helvetica">Dawn Mining
Company LLC (“Dawn”) — 51% Newmont
Owned</font></i>
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<div style="margin-top: 6pt; font-size: 1pt"> 
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<i>Midnite Mine Site.</i>  Dawn previously leased an
open pit uranium mine, currently inactive, on the Spokane Indian
Reservation in the State of Washington. The mine site is subject
to regulation by agencies of the U.S. Department of
Interior (the Bureau of Indian Affairs and the Bureau of Land
Management), as well as the United States Environmental
Protection Agency (“EPA”).
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
In 1991, Dawn’s mining lease at the mine was terminated. As
a result, Dawn was required to file a formal mine closure and
reclamation plan. The Department of Interior commenced an
analysis of Dawn’s proposed plan and alternate closure and
reclamation plans for the mine. Work on this analysis has been
suspended indefinitely. In mid-2000, the mine was included on
the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act
(“CERCLA”). In March 2003, the EPA notified Dawn and
Newmont that it had thus far expended $12 on the Remedial
Investigation/Feasibility Study (“RI/FS”) under
CERCLA. In October 2005, the EPA issued the RI/FS on this
property in which it indicated a preferred remedy that it
estimated to cost approximately $150. Newmont and Dawn filed
comments on the RI/FS with the EPA in January 2006. On
October 3, 2006, the EPA issued a final Record of Decision
in which it formally selected the preferred remedy identified in
the RI/FS.
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
On January 28, 2005, the EPA filed a lawsuit against Dawn
and Newmont under CERCLA in the U.S. District Court for the
Eastern District of Washington. The EPA has asserted that Dawn
and Newmont are liable for reclamation or remediation work and
costs at the mine. Dawn does not have sufficient funds to pay
for the reclamation plan it proposed or for any alternate plan,
or for any additional remediation work or costs at the mine.
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
On July 14, 2008, after a bench trial, the Court held
Newmont liable under CERCLA as an “operator” of the
Midnite Mine. The Court previously ruled on summary judgment
that both the U.S. Government and Dawn were liable under
CERCLA. On October 17, 2008 the Court issued its written
decision in the bench trial. The Court found Dawn and Newmont
jointly and severally liable under CERCLA for past and future
response costs, and ruled that each of Dawn and Newmont are
responsible to pay one-third of such costs. The Court also found
the U.S. Government liable on Dawn’s and
Newmont’s contribution claim, and ruled that the
U.S. Government is responsible to pay one-third of all past
and future response costs. In November 2008, all parties
appealed the Court’s ruling. Also in November 2008, the EPA
issued an Administrative Order pursuant to Section 106 of
CERCLA ordering Dawn and Newmont to conduct water treatment,
testing and other preliminary remedial actions. Newmont has
initiated those preliminary remedial actions. However, the issue
of whether the EPA’s current preferred remedy is consistent
with the National Contingency Plan has not yet come before the
Court.
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Newmont intends to continue to vigorously defend this matter and
cannot reasonably predict the outcome of this lawsuit or the
likelihood of any other action against Dawn or Newmont arising
from this matter.
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<i>Dawn Mill Site.</i>  Dawn also owns a uranium mill
site facility, located on private land near Ford, Washington,
which is subject to state and federal regulation. In late 1999,
Dawn sought and later received approval from the State of
Washington for a revised closure plan that expedites the
reclamation process at the site. The currently approved plan for
the site is guaranteed by Newmont.
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<i><font style="font-family: Arial, Helvetica">Newmont Canada
Limited (“Newmont Canada”) — 100% Newmont
Owned</font></i>
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<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i>On November 11, 2008, St.</i>  Andrew
Goldfields Ltd. (“St. Andrew”) filed an Application in
the Superior Court of Justice in Ontario, Canada, seeking a
declaration to clarify St. Andrew’s royalty
obligations regarding certain mineral rights and property
formerly owned by Newmont Canada and now owned by St. Andrew.
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Newmont Canada purchased the property, called the Holt-McDermott
property (“Holt Property”), from Barrick Gold
Corporation (“Barrick”) in October 2004. At that time,
Newmont Canada entered into a royalty agreement with Barrick
(the “Barrick Royalty”), allowing Barrick to retain a
royalty on the Holt Property. In August 2006, Newmont Canada
sold all of its interests in the Holt Property to Holloway
Mining Company (“Holloway”) in exchange for common
stock issued by Holloway. In September 2006, Newmont Canada
entered into a purchase and sale agreement with St. Andrew (the
“2006 Agreement”), under which St. Andrew acquired all
the common stock of Holloway. In 2008, Barrick sold its Barrick
Royalty to Royal Gold, Inc. (“Royal Gold”).
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<i>In the court proceedings, St.</i>  Andrew alleged
that in the 2006 Agreement it only agreed to assume royalty
obligations equal to 0.013% of net smelter returns from
operations on the Holt Property. Such an interpretation of the
2006 Agreement would make Newmont responsible for any royalties
exceeding that amount payable to Royal Gold pursuant to the
Barrick Royalty. On July 23, 2009, the Court issued a
decision finding in favor of St. Andrews’ interpretation.
On August 21, 2009, Newmont Canada appealed the decision.
Newmont Canada intends to continue to vigorously defend this
matter but cannot reasonably predict the outcome.
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<i><font style="font-family: Arial, Helvetica">Newmont Capital
Limited (“Newmont Capital”) — 100% Newmont
Owned</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
In February 1999, the EPA placed the Lava Cap mine site in
Nevada County, California on the National Priorities List under
CERCLA. The EPA then initiated a RI/FS under CERCLA to determine
environmental conditions and remediation options at the site.
Newmont Capital owned the property for approximately three years
from 1984 to 1986 but never mined or conducted exploration at
the site. The EPA asserted that Newmont Capital was responsible
for clean up costs incurred at the site. In February 2009, the
U.S. District Court for the Northern District of California
approved the related consent decree and the settlement with
respect to all aspects of this matter, except for future
potential Natural Resource Damage claims, was completed.
</div>
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<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i><font style="font-family: Arial, Helvetica">Newmont USA
Limited — 100% Newmont Owned</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i>Pinal Creek.</i>  Newmont was a defendant in a
lawsuit brought on November 5, 1991 in U.S. District
Court in Arizona by the Pinal Creek Group, alleging that Newmont
and others are responsible for some portion of costs incurred to
address groundwater contamination emanating from copper mining
operations located in the area of Globe and Miami, Arizona. Two
former subsidiaries of Newmont, Pinto Valley Copper Corporation
and Magma Copper Company (now known as BHP Copper Inc.) owned
some of the mines in the area between 1983 and 1987. In February
2010, Newmont settled all claims and liabilities in this matter
and such settlement is subject to court approval, which is
expected in March 2010.
</div>
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i>Gray Eagle Mine Site.</i>  By letter dated
September 3, 2002, the EPA notified Newmont that the EPA
had expended $3 in response costs to address environmental
conditions associated with a historic tailings pile located at
the Grey Eagle Mine site near Happy Camp, California, and
requested that Newmont pay those costs. The EPA has identified
four potentially responsible parties, including Newmont. Newmont
does not believe it has any liability for environmental
conditions at the Grey Eagle Mine site, and intends to
vigorously defend any formal claims by the EPA. Newmont cannot
reasonably predict the likelihood or outcome of any future
action against it arising from this matter.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i>Ross-Adams Mine Site.</i>  By letter dated
June 5, 2007, the U.S. Forest Service notified Newmont
that it had expended approximately $0.3 in response costs to
address environmental conditions at the
Ross-Adams mine in Prince of Wales, Alaska, and requested
Newmont USA Limited pay those costs and perform an Engineering
Evaluation/Cost Analysis (“EE/CA”) to assess what
future response activities might need to be completed at the
site. Newmont does not believe it has any liability for
environmental conditions at the site, and intends to vigorously
defend any formal claims by the EPA. Newmont has agreed to
perform the EE/CA. Newmont cannot reasonably predict the
likelihood or outcome of any future action against it arising
from this matter.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i><font style="font-family: Arial, Helvetica">PT Newmont
Minahasa Raya (“PTNMR”) — 80% Newmont
Owned</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
On March 22, 2007, an Indonesian non-governmental
organization named Wahana Lingkungan Hidup Indonesia
(“WALHI”) filed a civil suit against PTNMR the Newmont
subsidiary that operated the Minahasa mine in Indonesia, and
Indonesia’s Ministry of Energy and Mineral Resources and
Ministry for the Environment, alleging pollution from the
disposal of mine tailings into Buyat Bay, and seeking a court
order requiring PTNMR to fund a
<font style="white-space: nowrap">25-year</font>
monitoring program in relation to Buyat Bay. In December 2007,
the court ruled in PTNMR’s favor and found that
WALHI’s allegations of pollution in Buyat Bay were without
merit. In March 2008, WALHI appealed this decision to the
Indonesian Supreme Court.
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
Independent sampling and testing of Buyat Bay water and fish, as
well as area residents, conducted by the World Health
Organization and the Australian Commonwealth Scientific and
Industrial Research Organization, confirm that PTNMR has not
polluted the Buyat Bay environment, and, therefore, has not
adversely affected the fish in Buyat Bay or the health of nearby
residents. The Company remains steadfast that it has not caused
pollution or health problems.
</div>
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<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i><font style="font-family: Arial, Helvetica">Newmont Ghana
Gold Limited (“NGGL”) — 100% Newmont
Owned</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
On October 8, 2009, an overflow of processing solution
occurred at the Ahafo Mines in Ghana operated by Newmont’s
subsidiary, NGGL. A panel of the Minister of Environment,
Science & Technology of the Government of Ghana (the
“Panel”) was appointed to evaluate the overflow
incident. In January 2010, NGGL received notification of the
findings of the Panel, which recognized that there was no
regulatory framework by which to assess compensation or
penalties relating to such incidents. However, the Panel
recommended that compensation of seven million Ghana Cedis
(approximately $5) be paid by NGGL to the Ghanaian Government to
be used for community compensation and for other uses by the
Government. In January 2010, NGGL has committed to pay the
compensation and is working with the Ghana Government to execute
the payment. NGGL has also confirmed that it is implementing
appropriate corrective measures related to the incident.
</div>
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<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<b><i><font style="font-family: Arial, Helvetica">Other Legal
Matters</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i><font style="font-family: Arial, Helvetica">Minera Yanacocha
S.R.L. (“Yanacocha”) — 51.35% Newmont
Owned</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i>Choropampa.</i>  In June 2000, a transport
contractor of Yanacocha spilled approximately 151 kilograms of
elemental mercury near the town of Choropampa, Peru, which is
located 53 miles (85 kilometers) southwest of the Yanacocha
mine. Elemental mercury is not used in Yanacocha’s
operations but is a by-product of gold mining and was sold to a
Lima firm for use in medical instruments and industrial
applications. A comprehensive health and environmental
remediation program was undertaken by Yanacocha in response to
the incident. In August 2000, Yanacocha paid under protest a
fine of 1,740,000 Peruvian soles (approximately $0.5) to the
Peruvian government. Yanacocha has entered into settlement
agreements with a number of individuals impacted by the
incident. As compensation for the disruption and inconvenience
caused by the incident, Yanacocha entered into agreements with
and provided a variety of public works in the three communities
impacted by this incident. Yanacocha cannot predict the
likelihood of additional expenditures related to this matter.
</div>
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
Additional lawsuits relating to the Choropampa incident were
filed against Yanacocha in the local courts of Cajamarca, Peru,
in May 2002 by over 900 Peruvian citizens. A significant number
of the plaintiffs in these lawsuits entered into settlement
agreements with Yanacocha prior to filing such claims. In April
2008, the Peruvian Supreme Court upheld the validity of these
settlement agreements, which should result in the dismissal of
all claims brought by previously settled plaintiffs. Yanacocha
has also entered into settlement agreements with approximately
350 additional plaintiffs. The claims asserted by approximately
200 plaintiffs remain. Neither Newmont nor Yanacocha can
reasonably estimate the ultimate loss relating to such claims.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #ffffff">
<i><font style="font-family: Arial, Helvetica">Newmont Yandal
Operations Pty Ltd (“NYOL”) — 100% Newmont
Owned</font></i>
</div>
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<i>On September 3, 2003, J. Aron &
Co.</i>  commenced proceedings in the Supreme Court of
New South Wales (Australia) against NYOL, its subsidiaries and
the administrator in relation to the completed voluntary
administration of the NYOL group. J. Aron & Co., a
NYOL creditor, initially sought injunctive relief that was
denied by the court on September 8, 2003. On
October 30, 2003, J. Aron & Co. filed a statement
of claim alleging various deficiencies in the implementation of
the voluntary administration process and seeking damages and
other relief against NYOL and other parties. Newmont entered
into settlement discussions with the claimants J.
Aron & Co, and the fund administrators. In December
2009 Newmont and the claimants reached a settlement agreement,
which was approved by the court.
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<i><font style="font-family: Arial, Helvetica">PT Newmont Nusa
Tenggara (“PTNNT”) — 35.44% Newmont
Owned</font></i>
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Under the Batu Hijau Contract of Work, beginning in 2006 and
continuing through 2010, a portion of PTNNT’s shares must
be offered for sale, first, to the Indonesian government or,
second, to Indonesian nationals, equal to the difference between
the following percentages and the percentage of shares already
owned by the Indonesian government or Indonesian nationals (if
such number is positive): 23% by March 31, 2006; 30% by
March 31, 2007; 37% by March 31, 2008; 44% by
March 31, 2009; and 51% by March 31, 2010. As PT
Pukuafu Indah (“PTPI”), an Indonesian national, has
owned a 20% interest in PTNNT, in 2006 a 3% interest was
required to be offered for sale and in each of 2007 through 2010
an additional 7% interest must be offered (for an aggregate 31%
interest). The price at which such interest must be offered for
sale to the Indonesian parties is the highest of the
then-current replacement cost, the price at which shares would
be accepted for listing on the Indonesian Stock Exchange, or the
fair market value of such interest as a going concern, as agreed
with the Indonesian government.
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PTPI has owned and continues to own a 20% interest in PTNNT, and
therefore the Newmont-Sumitomo partnership was required to offer
a 3% interest in PTNNT for sale in 2006 and an additional 7%
interest in each of 2007 through 2010. In accordance with the
Contract of Work, an offer to sell a 3% interest was made to the
Indonesian government in 2006 and an offer for an additional 7%
interest was made in each of 2007 and 2008. A further 7%
interest in the shares of PTNNT was offered for sale in March
2009. While the central government declined to participate in
the 2006 and 2007 offers, local governments in the area in which
the Batu Hijau mine is located expressed interest in acquiring
shares, as did various Indonesian nationals. In January 2008,
the Newmont-Sumitomo partnership agreed to sell, under a carried
interest arrangement, 2% of PTNNT’s shares to Kabupaten
Sumbawa, one of the local governments, subject to satisfaction
of closing conditions. The Indonesian government subsequently
stated that it would not approve the transfer of shares under
this agreement. On February 11, 2008, PTNNT received
notification from the Department of Energy and Mineral
Resources (“DEMR”) alleging that PTNNT is in breach of
its divestiture requirements under the Contract of Work, and
threatening to issue a notice to terminate the Contract of Work
if PTNNT did not agree to divest the 2006 and 2007 shares,
in accordance with the direction of the DEMR, by
February 22, 2008, which date was extended to March 3,
2008. A second Notice of Default was received relating to the
alleged failure to divest the 2008 shares as well. On
March 3, 2008, the Indonesian government filed for
international arbitration as provided under the Contract of
Work, as did PTNNT. In the arbitration proceeding, PTNNT sought
a declaration that the Indonesian government is not entitled to
terminate the Contract of Work and additional declarations
pertaining to the procedures for divesting the shares. For its
part, the Indonesian government sought declarations that PTNNT
is in default of its divestiture obligations, that the
government may terminate the Contract of Work and recover
damages for breach of the Contract of Work, and that PTNNT must
cause shares subject to divestiture to be sold to certain local
governments.
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Subsequent to an additional 7% interest in PTNNT being offered
by NTP for sale on March 28, 2008 (as required under the
Contract of Work), the Director General of Mineral, Coal and
Geothermal Resources at DEMR claimed that PTNNT breached its
obligations under the Contract of Work by allowing shares to be
offered for sale that are pledged to the Senior Lenders as
security for the repayment of the senior debt. In the letter,
the Director General claimed that NTP would be in default under
the Contract of Work if the shares of PTNNT offered for sale in
March 2008, together with the shares offered in 2006 and 2007,
were not in the possession of “Indonesian government
<font style="white-space: nowrap">and/or</font>
government owned entities,” free of any such senior pledge,
by July 13, 2008. Consequently, on July 10, 2008,
PTNNT filed a notice to commence an additional international
arbitration proceeding, as provided for under the Contract of
Work, to resolve the claim that PTNNT breached its obligations
under the Contract of Work by allowing shares to be offered that
are subject to pledge obligations to the Senior Lenders. This
issue was incorporated into and resolved as part of the initial
arbitration proceeding.
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An international arbitration panel was appointed to resolve
these claims and a hearing was held in Jakarta in December 2008.
On March 31, 2009, the arbitration panel issued its Final
Award and decision on the matter. In its decision, the
arbitration panel determined that PTNNT’s foreign
shareholders had not complied with the divestiture procedure
required by the Contract of Work in 2006 and 2007, but the panel
ruled that the Indonesian government is not entitled to
immediately terminate the Contract of Work and the panel
rejected the Indonesian government’s claim for damages. The
Arbitration Panel granted PTNNT 180 days from the date of
notification of the Final Award to transfer the 2006 3% interest
and the 2007 7% interest in PTNNT to the local governments or
their respective nominees. The Arbitration Panel also applied a
<font style="white-space: nowrap">180-day</font> cure
period to the 2008 7% interest, ruling that PTNNT must (within
such <font style="white-space: nowrap">180-day</font>
period) offer the 2008 7% interest to the Indonesian government
or its nominee, and transfer such shares if, after agreement on
the transfer price, the Indonesian government invokes its right
of first refusal under the Contract of Work. The panel ruled
that shares offered to the Indonesian government pursuant to the
Contract of Work must be offered free of any pledge or
obligation to re-pledge the shares to the Senior Lenders.
Finally, the Panel directed PTNNT to pay to the Indonesian
government an allocated portion of certain legal fees and costs
of the arbitration. PTNNT submitted payment of $2 for legal fees
and costs. The Company also entered a formal agreement with the
Senior Lenders under which the Senior Lenders released the
pledge on the aggregated 31% of shares in PTNNT that are subject
to divestiture requirements in exchange for the Company and
Sumitomo agreeing to provide joint and several guarantees, thus
allowing the Company to transfer these shares free of any pledge
or obligation to re-pledge the shares to the lenders. The
Company subsequently replaced this joint and several guarantee
in October with letters of credit supporting 56.25% of the
obligations under the PTNNT project financing facility. On
July 14, 2009, the Company reached agreement with the
Indonesian government on the
price of the 2008 7% interest and the 2009 7% interest. PTNNT
has reoffered the 2008 7% interest and the 2009 7% interest to
the Indonesian government at this newly agreed price. In
November and December 2009, sale agreements were concluded
pursuant to which the 2006, 2007 and 2008 shares were
transferred to PTMDB and 2009 shares were committed to be
transferred to PTMDB. Although the Indonesian Government has
acknowledged that PTNNT is no longer in breach of the Contract
of Work, future disputes may arise as to the further divestiture
of the shares. It is uncertain who will acquire any future
divestiture shares, and the nature of our relations with the new
owners of the
<font style="white-space: nowrap">2006-2009 shares</font>
and any future divestiture shares remain uncertain.
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As part of the negotiation of the sale agreements with PTMDB,
the parties executed an operating agreement under which each
recognizes the right of NTP to operate Batu Hijau and binds the
parties to adhere to NTP’s standards for safety,
environmental stewardship and community responsibility. The
operating agreement becomes effective upon the completion of the
sale of the 2009 shares and continues for so long as the
Company owns more shares of PTNNT than PTMDB. If the operating
agreement terminates, then the Company may lose effective
economic control over the operations of Batu Hijau and will be
at risk for operations conducted in a manner that either
detracts from value or results in safety, environmental or
social standards below those adhered to by NTP. Although any
dispute under the Contract of Work is subject to international
arbitration, there can be no assurance that we would prevail in
any such dispute and any termination of the Contract of Work
could result in substantial diminution in the value of our
interests in PTNNT.
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<b><i><font style="font-family: Arial, Helvetica">Other
Commitments and Contingencies</font></i></b>
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Tax contingencies are provided for in accordance with ASC income
tax guidance (see Note 8).
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In a 1993 asset exchange, a wholly-owned subsidiary transferred
a coal lease under which the subsidiary had collected advance
royalty payments totaling $484. From 1994 to 2018, remaining
advance payments under the lease to the transferee total $390.
In the event of title failure as stated in the lease, this
subsidiary has a primary obligation to refund previously
collected payments and has a secondary obligation to refund any
of the $390 collected by the transferee, if the transferee fails
to meet its refund obligation. The subsidiary has title
insurance on the leased coal deposits of $240 covering the
secondary obligation. The Company and the subsidiary regard the
circumstances entitling the lessee to a refund as remote.
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The Company has minimum royalty obligations on one of its
producing mines in Nevada for the life of the mine. Amounts paid
as a minimum royalty (where production royalties are less than
the minimum obligation) in any year are recoverable in future
years when the minimum royalty obligation is exceeded. Although
the minimum royalty requirement may not be met in a particular
year, the Company expects that over the mine life, gold
production will be sufficient to meet the minimum royalty
requirements. Minimum royalty payments payable are $23 per year
in 2010 through 2014 and $116 thereafter.
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As part of its ongoing business and operations, the Company and
its affiliates are required to provide surety bonds, bank
letters of credit and bank guarantees as financial support for
various purposes, including environmental reclamation,
exploration permitting, workers compensation programs and other
general corporate purposes. At December 31 2009 and 2008, there
were $1,073 and $778, respectively, of outstanding letters of
credit, surety bonds and bank guarantees. The surety bonds,
letters of credit and bank guarantees reflect fair value as a
condition of their underlying purpose and are subject to fees
competitively determined in the market place. The obligations
associated with these instruments are generally related to
performance requirements that the Company addresses through its
ongoing operations. As the specific requirements are met, the
beneficiary of the associated instrument cancels
<font style="white-space: nowrap">and/or</font>
returns the instrument to the issuing entity.
Certain of these instruments are associated with operating sites
with long-lived assets and will remain outstanding until
closure. Generally, bonding requirements associated with
environmental regulation are becoming more restrictive. In
addition, the surety markets for certain types of environmental
bonding used by the Company have become increasingly
constrained. The Company, however, believes it is in compliance
with all applicable bonding obligations and will be able to
satisfy future bonding requirements, through existing or
alternative means, as they arise.
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Newmont is from time to time involved in various legal
proceedings related to its business. Except in the
above-described proceedings, management does not believe that
adverse decisions in any pending or threatened proceeding or
that amounts that may be required to be paid by reason thereof
will have a material adverse effect on the Company’s
financial condition or results of operations.
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