Newmont may suffer loses this year due to falling price

Copper and gold operator PT Newmont Nusa Tenggara (NTT) may suffer financial loses this year due to uncertainty in the world?s copper and gold market, the company?s executive has said.

The company?s senior manager for external affairs Robert Humberson said on Saturday that prices of gold and copper had plunged sharply since the company started the production of gold and copper fields in Batu Hijau, West Nusa Tenggara.

According to him, the prices of the two commodities have dropped below operating cost. ?But we will continue to operate although for example, last year the production could be used only to cover production costs,? he said when receiving a visit of several senior mining officials from Jakarta.

Newmont Nusa Tenggara has an estimated gold and copper reserves of 5.02 million tons and 337 million tons respectively in the Batu Hijau mine. The company, which started production in late 2000, is considered one of successful gold mines in the country.

During the meeting, the local people questioned the government?s plan to allow the direct transfer of the company?s royalties to local administration. At present the royalties are paid to the finance minister?s account in Jakarta before being disbursed to the local government. This often causes a delay in the disbursement.

Humberson said that the company had sent a letter to the ministry of finance to allow it to transfer the royalties to the local government.

According to the new autonomy law, the local administration receives 70 percent of the royalties, and the central government receives the remaining 30 percent. (*)