Uzbekistan to take over Newmont venture -source
Source: Reuters
By Shamil Baigin TASHKENT, Oct 31 (Reuters) - Uzbekistan's government may take over a gold mining joint venture previously half-owned by U.S.-based Newmont Mining Corp. <NEM.N> by the end of the year, a source close to the procedure said on Tuesday. Two foreign gold companies including Newmont have run into problems after the West condemned Uzbekistan over a government crackdown on a rebellion in Andizhan last year. Earlier this month an Uzbek court declared the Newmont gold venture bankrupt after seizing $49 million in taxes. It also appointed a local official to run the venture. The source close to the procedure told Reuters the government was now considering either calling a tender to auction off Newmont's interest to a local investor or transforming it into a 100-percent state owned enterprise. If the government opted for the first option, the most likely winner would be state-controlled Navoi metals plant (NGMK), the source said. Denver-based Newmont was not available for comment. In July, Uzbek authorities seized gold and some of the assets belonging to Zarafshan-Newmont, the other 50 percent of which is owned by the government of Uzbekistan, and launched two tax claims for payments it said were due between 2002 and 2005. Newmont's 50 percent share of gold sold by the Uzbek joint venture last year was 122,700 ounces. Newmont in September cut its forecast for gold sales this year and next partly due to loss of business in Uzbekistan and lower output in Ghana and Peru. It said it expected sales to recover in 2008 and 2009 when projects in the United States, Ghana and Australia reached full production. Another foreign gold miner operating in Uzbekistan, Britain's Oxus Gold <OXS.L>, has also run into problems in the former Soviet country. A local court issued a ruling last week against its joint venture there claiming a total of $223.8 million in back taxes and other violations. Its shares slumped almost 30 percent on the news in London on Oct.27.
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