Govt concludes contract renegotiation with Newmont

The government concluded on Tuesday mining contract renegotiation process with gold and copper giant PT Newmont Nusa Tenggara (PTNNT), in which the Indonesian subsidiary of the US-based Newmont Mining Corp agreed in principle on all of the proposed six points of contract amendment.

Director General of Mineral and Coal R. Sukhyar said that an MoU on the conclusion of the mining contract renegotiation was expected to be signed by PTNNT and the government on Wednesday, paving the way for the company to be able to resume export of mineral concentrates which has been suspended for the past eight months.

Sukhyar added that PTNNT has also agreed to put into the government?s bank account fund worth US$25 million as a form of commitment to develop the required domestic smelter. PNNT will participate in the planned domestic smelter to be developed by gold and copper giant PT Freeport Indonesia.

PTNNT President Director Martono Hadianto was also hopeful that the company would soon be able to obtain export permit as it has agreed in principle on the points of contract renegotiation proposed by the government.

The conclusion of the mining contract renegotiation process came after the company last week withdrew its international arbitration filed against the government of Indonesia.

PTNNT, which operates the Batu Hijau mine in West Nusa Tenggara Province, has not been able to export copper concentrates since January of this year after the government introduced a tougher export requirements including an obligation to build domestic smelter, paying punitive export duty, and concluding mining contract renegotiation, all of which led to the company filing the international lawsuit.

But after the government decided to drastically ease the export duty on mineral concentrates, following protest from miners, and conclusion of mining contract renegotiation with Freeport, hopes were high that PTNNT would withdraw its lawsuit and return to the negotiation table.

As reported earlier by this portal, Sukhyar said that PTNNT is expected to export a total of 200,000 tons of copper concentrates to Japan, Spain, and Thailand until end of this year, providing foreign exchange revenue of about US$400 million. (*)