DENVER (Yosefardi) – Newmont Mining Corporation is evaluating potential impacts to its operating plans at Batu Hijau from the mineral ore export ban policy.
PT Newmont Nusa Tenggara (NNT) operates the Batu Hijau copper and gold mine on the island of Sumbawa in Indonesia.
Although Indonesian government officials have informed NNT that the ban on copper concentrate exports from Batu Hijau does not take effect until January 11, 2017, as provided for in recently issued regulations, the regulations also include new and potentially restrictive conditions to obtain an export permit, as well as a significant export duty.
“The Contract of Work (CoW) signed with the Government of Indonesia provides NNT the right to export the copper concentrate produced at Batu Hijau’s processing facility,” said Blake Rhodes, Newmont’s Senior Vice President, Indonesia. “The CoW also explicitly sets the types and levels of taxes, levies, and duties PTNNT is required to pay, thereby establishing all tax obligations.”
NNT will continue to engage with government officials in Indonesia in an effort to resolve this issue, while also considering other remedies, including possible legal action.
NNT is currently mining Phase Six of Batu Hijau, with plans to gain access to higher grade ore later this year. NNT does not have plans to export copper concentrate until later this quarter, as previously scheduled shipments were completed in early January.
The value added through Batu Hijau’s processing plant improves the quality of the copper ore mined by more than 50 times, capturing roughly 95 percent of the entire value stream in Indonesia. NNT also has supported in-country smelting for many years by shipping as much copper concentrate to PT Smelting Gresik – Indonesia’s only copper smelter – as it can take from Batu Hijau.
Since operations began in 2000, NNT has paid more than $3 billion in taxes and royalties to the government, in addition to investing approximately $10 million each year toward local economic, infrastructure and social development. Approximately 9,000 people, including employees and contractors, support their families by working at Batu Hijau.