Newmont gets extension of export permit

The government has finally extended the copper concentrates export permit of PT Newmont Nusa Tenggara for another six months until September 2015.

Newmont is given an export quota of 477 million tons, up more than 56 percent from the 304,515 tons quota set in the previous permit, which expired Wednesday.

The Ministry of Energy and Mineral Resources issued the recommendation for an extension of the permit, despite the fact that Newmont failed to submit concrete plan about its copper cathode smelter projects with another gold and copper giant PT Freeport Indonesia, and other firms.

Director General of Mineral and Coal R. Sukhyar was quoted by Bisnis Indonesia as saying that the PT Freeport Indonesia smelter project in Gresik, East Java, in which Newmont has expressed commitment to participate, has reached 62 percent progress, higher than the minum 60 percent progress as condition for extension of the export permit.

Meanwhile, he was quoted by The Jakarta Post as saying that because Newmont has presented a MoU with PT Freeport outlining that it is ready to contribute to or participate in the smelter development, his office decided to sign the recommendation for export permit extension.

The government introduced an export ban on mineral ores in early 2014 as mandated by the 2009 Mining Law in a bid to generate greater value added from mineral commodities by forcing miners or investors do develop domestic smelters. But, the government allowed mineral concentrates to be exported until 2017 on the condition that the miners would serious developed the required domestic smelter.

Progress of the planned US$2.3 billion copper cathode smelter by PT Freeport, however, remains unclear as the company insisted on certainty over its request for an extension of its mining contract before making multi-billion dollar investment.

Newmont Nusa Tenggara has also signed agreements with several other companies that plan to develop smelters, such as PT Nusantara Smelting, PT Indosmelt and PT Indovasi Mineral Indonesia. Under the agreement, Newmont would supply copper concentrate to the aforementioned smelters. However, no progress has yet been reported. (*)