The Indonesian unit of US-based gold miner Newmont Mining, the PT Newmont Nusa Tenggara (PTNNT), has halted production of copper concentrate at its Batu Hijau mine in Indonesia, saying that its storage facility has reached full capacity.
According to a mining union official, the move was a consequence of the mineral export ban imposed by the Indonesian Government in January and the introduction of a higher tax on copper concentrate exports.
Following the announcement of the ban, Newmont said it would reduce production at its Batu Hijau gold and copper mine from 1 June, unless it received permission to export concentrates.
Newmont and Freeport-McMoRan, which account for 97% of Indonesia's total copper output, had previously criticised the new law, stating that the increased taxes conflict with the original long-standing agreements signed with Indonesia.
The introduction of new taxes has affected about $500m worth of monthly mineral ore and concentrate exports, and forced Newmont to halt production.
Newmont said in a statement: "The company has delayed to put employees on stand-by status at home on paid leave at reduced compensation, in anticipation of a ministerial meeting this week that is intended to clarify the conditions under which copper concentrate exports will be permitted."
Meanwhile, the Indonesian copper industry is hoping that the newly appointed chief economics minister Chairul Tanjung will help restart concentrate exports in the country.
Tanjung has stated that he would review the mining export rules after they hampered the first quarter's economic growth, which was the slowest in more than four years.
Image: The reclamation area at the PT Newmont Nusa Tenggara (PTNNT) operation at Batu Hijau in Indonesia. Photo: courtesy of PT Newmont Nusa Tenggara (PTNNT).