Newmont gets permit to restart Indonesia copper exports this week
Newmont Mining (NYSE:NEM) said Monday it has received a permit from the Indonesian government to restart ore shipments, with copper concentrate exports likely to resume this week.
The US copper and gold miner agreed earlier this month to pay an increased export tax. The other points agreed in the renegotiations include royalties, size of mining and exploration area, domestic processing and divestment obligations and possible mining contract extension.
The company also said it will provide a $25 million assurance bond to demonstrate its support for smelter development in Indonesia, which is pushing companies to refine mineral products domestically, part of a drive to build up the country's value-added economy.
The announcement marks the end of a long-dragged dispute between the Colorado-based miner and Indonesia over an export tax imposed in January that the firm said conflicted with its mining contract. The company declared force majeure at its Batu Hijau copper and gold mine in June and filed for international arbitration in July, withdrawing a month later.
“For the more than 8,000 employees and contractors at Batu Hijau and their families, the resumption of operations marks an important milestone in restoring their livelihoods, as well as supporting the economy of the Sumbawa Barat region,” Martiono Hadianto the president director for Newmont's subsidiary in the Southeast Asian nation, said in a statement.
The Batu Hijau mine, on the island of Sumbawa Barat, began its operations in 2000. The company had forecasted copper concentrate output for 2014 at 110,000-125,000 tonnes before the new export rules.