Indonesia Government and Newmont sign MoU to resume mineral exports

3 September 2014 (Last Updated September 3rd, 2014 18:30)

A subsidiary of US-based Newmont Mining, PT Newmont Nusa Tenggara (PTNNT), has signed a memorandum of understanding (MoU) with the Indonesian Government allowing it to resume copper concentrate exports from the country.

A subsidiary of US-based Newmont Mining, PT Newmont Nusa Tenggara (PTNNT), has signed a memorandum of understanding (MoU) with the Indonesian Government allowing it to resume copper concentrate exports from the country.

PTNNT president director Martiono Hadianto said: "Our agreement demonstrates PTNNT's commitment to supporting the government's strategy to increase domestic processing and to restarting operations for the benefit of the people of Indonesia.

"All parties recognise that resuming copper concentrate exports from Batu Hijau is vital to protecting the livelihoods of the thousands of employees and contractors who work at the mine, while also restoring the economy of the region."

"Resuming copper concentrate exports from Batu Hijau is vital to protecting the livelihoods of the thousands of employees and contractors who work at the mine."

As per the MoU, the company has agreed on six areas, including concession area size; royalties, taxes and export duties; domestic processing and refining; ownership divestment; utilisation of local manpower, domestic goods and services; and duration of the contract of work (CoW).

Under the latest deal, the company will be allowed to resume exports of up to 200,000t of copper concentrates until the end of the year.

Additionally, PTNNT will pay an export tax of 7.5% on copper concentrates, which is similar to the rate accepted by Freeport-McMoRan Copper & Gold in early August, which allowed it to resume exports from the country.

PTNNT will also pay increased royalties on gold, copper and silver, which have been raised from 1% to 3.75% for gold, 3.5% to 4% for copper and 1% to 3.25% for silver.

In order to resume exports, PTNNT will pay the government a $25m deposit for the construction of smelting facilities.

PTNNT and the Indonesian Government will now begin negotiations to amend the CoW, which is expected to be completed within six months.