PT Newmont Nusa Tenggara (PTNNT) said on Wednesday that it will scale down operations at its Batu Hijau copper and gold mine on Sumbawa Barat in Indonesia, unless ongoing discussions with the Government do not result in securing initial export permit.
According to the press release by PT Newmont, the company had already obtained registered exporter status from the Ministry of Trade in April, which is a necessary milestone prior to receiving the export permit.
PTNNT said it will be forced to cease mining and milling once Batu Hijau’s copper concentrate storage facilities reach capacity in late May, which would also result in scaling back contracted services, purchasing, and capital expenditure, with corresponding adjustments in employee work schedules and reductions in overtime.
The company said it will place most of its employees on leave at reduced pay starting June in order to minimize expenses and preserve the ability to return to normal operations in a timely fashion. However, PTNNT stressed it will maintain appropriate controls to protect the safety and security of people, water resources and the environment.
“We support the government’s stated goal of increased domestic processing and continue engaging with the government to resume exports and protect the existing jobs, local businesses and government revenues supported by the export and sale of Batu Hijau’s copper concentrate,” said Martiono Hadianto, PTNNT’s President Director.
“While our Contract of Work explicitly guarantees our right to export copper concentrate and establishes all the taxes and duties PTNNT is required to pay, we have taken numerous steps to support the government’s desire to increase in-country smelting. This is a very unfortunate and difficult situation for all of us, as it will disrupt the lives of our 8,000 employees and contractors and impact thousands of more people in the Sumbawa Barat area who derive their incomes from our operation.”
Meanwhile, Batu Hijau will continue shipping and selling copper concentrate to PT Smelting in Gresik, Indonesia through the remainder of 2014, but the smelter has capacity limitations and will not be able to purchase sufficient quantities of PTNNT’s copper concentrates to allow continued normal production at Batu Hijau.
