Newmont Mining cuts production by 70% following new tax laws

26 March 2014 (Last Updated March 26th, 2014 18:30)

US-based gold producer Newmont Mining has slashed production at its copper and gold mine in Indonesia by 70%, following the imposition of the ban on ore shipment and export tax.

Newmont

US-based gold producer Newmont Mining has slashed production at its copper and gold mine in Indonesia by 70%, following the imposition of the ban on ore shipment and export tax.

The controversial ore export ban was imposed by the government on 12 January, in an attempt to boost the domestic mineral processing industry so as to increase exports value.

The county has initially given a respite from the ban to US mining companies Newmont Mining and Freeport-McMoRan copper and gold, who were allowed to export partially processed copper concentrate up to 2017.

Indonesia later announced that both US mining companies would have to pay progressive export tax on their concentrates.

Newmont and Freeport-McMoRan copper and gold account for 97% of Indonesia's total copper output and have criticised the tax law, saying that it is breach of long-standing contracts.

"Newmont and Freeport-McMoRan copper and gold account for 97% of Indonesia's total copper output."

Newmont, which runs the Batu Hijau mine in Indonesia, noted that that it expects to continue operating as normal at the Indonesian mine for at least the next two months.

Indonesian Government mineral enterprise director Dede Suhendra told Reuters that the mining company was yet to restart exports since January, but was able to supply concentrates to the only smelter at Gresik.

"Newmont's production until today is only 30%," Suhendra said.

Indonesia is a major global exporter of metals, such as bauxite, copper and nickel.


Image: Newmont Mining's Batu Hijau open pit. Photo: courtesy of Randi Ang.

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