Newmont Nusa Tenggara (PTNNT) and its Dutch shareholder Nusa Tenggara Partnership have withdrawn their international arbitration suit against the Indonesian Government, raising hopes of resuming operations at its Batu Hijau mine.
The company halted operations at Batu Hijau mine in June this year and filed the arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in July, after Indonesia had refused to revoke its ban and additional taxes on copper ore and concentrate exports.
PTNNT said in a statement: "The decision to discontinue and withdraw arbitration comes after commitments from senior government officials to open formal negotiations to conclude a memorandum of understanding (MoU) with PTNNT upon cessation of the arbitration claim.
"Signing of a MoU with the government would be followed by the safe ramp-up of copper concentrate production and exports from Batu Hijau."
The Indonesian Government introduced the export ban and progressive tax on concentrates to encourage companies build smelters and processing plants in the country.
Another US mining company, Freeport-McMoRan Copper & Gold, also halted its copper exports from the country since the announcement of the revised export policy.
However, in early August, Freeport's Indonesian arm resumed exports in the country after signing a MoU with the government in July, where the company agreed to build a smelter.
PTNNT said: "While multiple studies have demonstrated that it is not economically viable for PTNNT to build its own smelter, the company has a memorandum of understanding to participate in a process with PT Freeport Indonesia designed to lead towards the development of a smelter.
"PTNNT also has negotiated and signed conditional concentrate supply agreements with two Indonesian companies that publicly announced plans to build their own copper smelters in the country."
According to Newmont Indonesia workers' union chairman Yoesrawan Galang, the company is expected to sign a MoU with the government next week and to return to full production at the mine by mid October, reported Reuters.
Image: The Batu Hijau mine is located in Sumbawa in the West Nusa Tenggara province of Indonesia. Photo: courtesy of Randi Ang.