Japan owners of smelter want negotiated end to Indonesia dispute
TOKYO Nov 8 (Reuters) - The Japanese owners of Southeast Asia's only aluminium smelter said they seek an amicable resolution of a dispute with the Indonesian government over its takeover of the plant and are holding off on possible arbitration.
A week has passed since Indonesia took control of Sumatra-based PT Indonesia Asahan Aluminium (Inalum) after talks failed to produce an agreement over the price and other details for transferring ownership of the smelter to Indonesia.
The Japanese side earlier said it would bring the case to the International Center for Settlement of Investment Disputes (ICSID) if talks failed.
"Our negotiations are still continuing, but both parties think we should come to a conclusion as soon as possible," Jun Yamamoto, general manager of the aluminium division at Sumitomo Chemical Co Ltd, which represents a consortium of Japanese shareholders, told Reuters in an telephone interview on Friday.
"We still want to resolve this issue amicably, but we are also prepared to seek for arbitration at ICSID if no agreement is made," he said.
Some Japanese government officials are worried the dispute will hurt relations between Indonesia and Japan, which has billions of dollars of investments in the resource-rich Southeast Asian country, according to industry sources.
Indonesia's takeover of PT Inalum, which produced 246,000 tonnes of aluminium in the year ended March 2012, is part of efforts by Southeast Asia's biggest economy to earn more revenue from its natural resources and curb foreign ownership.
Inalum is Southeast Asia's only aluminium smelter, and one of only a handful of smelters in Indonesia, which could explain why it is such a desirable asset for Indonesia as it pushes to develop mineral processing facilities along with a controversial 2014 ore export ban rule.
Nippon Asahan Aluminium (NAA), a consortium of 12 Japanese firms, has been in talks for several months to sell its stake to the Indonesian government, which owns the rest.
Negotiations have been held up over differing valuations of Inalum's assets and other conditions. (Reporting by Yuka Obayashi; Edited by Aaron Sheldrick and Jane Baird)
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