Newmont threatens to stop production at Batu Hijau mine

Copper producer PT Newmont Nusa Tenggara (NTT), the local unit of US giant Newmont Corp, has threatened to stop production at its Batu Hijau mine as the government is pressing ahead with its plan to ban the export of copper concentrates starting January 12, 2014, reports Friday said.

NNT President Director Martiono Hadianto in a September 16 internal memo to staff and company headquarter in the US said that the company must prepare emergency measures including the possibility of stopping production at Batu Hijau as it has not yet obtained confirmation from the government on copper ores export after January 12, 2014.

Martiono said that the company would not have sufficient revenue if its output is only supplied to PT Smelting Gresik, in East Java, the only copper smelter in the country.

The government, as mandated by the 2009 mining law, has decided to ban the export of mineral ores next year in a bid to push for the development of downstream industries at home, requiring miners to build domestic smelters or cooperate with third party investors.

Newmont has said that it would not build the smelters because it is not economically feasible. Two investors have expressed interest in developing domestic copper smelters, but even if they?re realized it would only start operation in 2017 at the soonest, leaving Newmont and another giant producer PT Freeport Indonesia unable to market the bulk of their production. (*)