Newmont reports lower output from Batu Hijau mine

By Ruli Setiawan

US-based Newmont Mining Corp reported that gold production at its Batu Hijau mine on Sumbawa Island, West Nusa Tenggara province, Indonesia, dropped by 75 percent in the third quarter of this year to 1,000 ounces from 4,000 oz in the same period of last year.

The mine, operated by its Indonesian subsidiary PT Newmont Nusa Tenggara (NNT), saw copper production plunged by 84 percent during the third quarter year-on-year, according to figures leased by Newmont Friday (see table below).

While it did not provide explanation for the production drop, NNT was forced to suspend production at the Sumbawa mine in June as it had not been able to make export since January of this year following the introduction of an export ban policy by the government.

NNT only managed to resume export in September after meeting a number of requirements set by the government including signing an MoU on the conclusion of mining contract renegotiation with the government.

While the MoU was supposed to lead to contract amendment, as mandated by the 2009 mining law, the Ministry of Energy and Mineral Resources suspended the amendment of the NNT mining contract work after PT Pukuafu Indah, which holds a 20 percent stake in Newmont filed a judicial review of the mining law, Investor Daily reported on Monday quoting Director General of Mineral and Coal R. Sukhyar.

Table: NNT third quarter, nine-month production results

Attributable Production (koz, kt)
Three Months Ended September 30				Nine Months Ended September 30
Batu Hijau	2014	2013	% Change	2014	2013	% Change
Gold	1	4	-75%	16	17	-6%
Cooper	1.4	8.6	-84%	19.3	25.4	-24%
CAS Consolidated ($/oz, $/lb)
Batu Hijau	2014	2013	% Change	2014	2013	% Change
Gold	2,869	846	239%	1,827	2,487	-27%
Cooper	9.81	2.74	258%	5.50	5.60	-2%
AISC Consolidated ($/oz, $/lb)
Batu Hijau	2014	2013	% Change	2014	2013	% Change
Gold	3,556	1,286	177%	2,458	3,121	-21%
Cooper	11.17	3.82	193%	7.00	6.91	1%

Editing by Reiner Simanjuntak