Newmont estimates profit to reach US$300 million this year

PT Newmont Nusa Tenggara (NNT) has estimated its profits will increase to about US$300 million this year from US$224 million in the previous year if the copper price continues to stay at the current level until the end of the year, Investor Daily reported on Friday.

PT NNT's financial director Dan Desjarding said in Sumbawa on Thurday that the company was optimistic that the projected profits could be achieved given a continued increase in the demand for the metal in the global market, particularly from China.

"The demand for the copper rose by 50 percent a year during the last four years, and this trend will likely continue. The demand from Europe and the United States is also on the rise," he added.

PT NTT which operates a large copper and gold mine in Batu Hijau in the island of Sumbawa, West Nusa Tenggara, booked a profit of US$224 million last year with total copper concentrate production reaching 718 million pounds.

"Last year's profit almost doubled the profit in 2003," he said. The company early this week said that its copper production was projected to decline to 700 million pounds this year because the larger part of the copper ores to be processed would be of those of lower grade. The company also produces gold in the Batu Hujau mine.

PT NNT exports its copper concentrate to Japan, South Korea, China, Indonesia, the Philippines, Germany and Finland. The company which also supplies the Gresik refinery plant in East Java, exports about 250,000 tons of copper concentrate a day.

"We are upbeat the copper price will stay at the current level of US$1.5 per pound of copper concentrate at least until the next six months," he added.

Dan said that the company would increase capital expenditure to US$72 million this year from US$43 million last year to increase processing capacity and develop the mining operations. (*)