PTNNT to resume operations and exports
Thursday, September 4 2014 - 07:57 AM WIB
Once the export permit is received, PTNNT will recall employees and contractors to work and begin ramping up operations at the Batu Hijau copper and gold mine in Lombok, West Nusatenggara in a safe and timely manner. The company expects Batu Hijau to begin exporting copper concentrate and to resume normal operations during September.
The MoU, signed by R. Sukhyar, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, and Martiono Hadianto, PTNNT?s President Director, will lead to mutually agreed upon modifications to PTNNT?s Contract of Work (CoW), the company said in a statement.
?Our agreement demonstrates PTNNT?s commitment to supporting the Government?s strategy to increase domestic processing, and to restarting operations for the benefit of the people of Indonesia,? said Martiono. ?All parties recognize that resuming copper concentrate exports from Batu Hijau is vital to protecting the livelihoods of the thousands of employees and contractors who work at the mine, while also restoring the economy of the region.?
The MoU outlines a mutual understanding on the six key elements of the CoW renegotiation, which will be incorporated into an amendment of the CoW. The six areas are: concession area size; royalties, taxes and export duties; domestic processing and refining; ownership divestment; utilization of local manpower, domestic goods and services; and duration of the CoW.
Effective with the signing of the MoU, PTNNT agreed to pay export duties set forth in a new regulation issued in July 2014, provide a US$25 million assurance bond to demonstrate its support for smelter development, pay royalties of 4 percent for copper, 3.75 percent for gold, and 3.25 percent for silver, and pay deadrent of $2 per hectare.
On July 25, 2014, the Ministry of Finance revised its January 2014 regulations to reduce export duties on copper concentrate for companies demonstrating support for the smelter development process. The revised regulations provide for export duties on copper concentrate to reduce as development progresses, with duties initially at 7.5 percent, then declining to 5 percent when development progress exceeds 7.5 percent and finally to 0 percent when smelter progress exceeds 30 percent.
PTNNT and the government will commence negotiations to amend the CoW, with completion anticipated within six months. No terms of the CoW other than the duties, smelter bond, royalties, and deadrent described above will be changed until completion of the CoW renegotiation
Editing by Johannes Simbolon