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S-based mining giant PT Newmont Nusa Tenggara (NNT) says it has halted processing activities and copper-concentrate production at its Batu Hijau mine in West Nusa Tenggara, as it seeks clarity from the government on exports.

The copper-concentrate storage facilities at Batu Hijau on Sumbawa Island were at full capacity, forcing the company to halt operations, the company said in a press statement on Tuesday.

The company also said it had delayed its decision on furloughs for some of its workforce with reduced compensation, while awaiting a decision from a ministerial meeting later this week.

The suspension was aimed at clarifying whether the company would get permits to export its copper concentrate, and what conditions would be applied to the company, it said.

Newmont halted shipments of its copper concentrate soon after the government started banning exports of all raw mineral ores, including nickel and bauxite, on Jan. 12.

The ban is in compliance with the 2009 Mining Law, which stipulates that only finished products can be exported in an attempt to develop the downstream extractive industry and to increase added value for the country.

The government, however, still allows shipments of some processed minerals such as copper concentrate but subject to an export tax.

The tax range has been set at between 20 percent and 60 percent, depending on the type of minerals and concentrate level, and to be applied from 2014 to 2016.

However, Newmont '€” as well as PT Freeport Indonesia, another US-based mining giant, which operates the world'€™s second-largest copper mine and the world'€™s largest gold reserves in remote Papua '€” have previously asked that the taxes be reduced.

Newly installed Coordinating Economic Minister Chairul Tanjung said on Tuesday that any changes to the regulation on export duties were now pending mining contract renegotiation deals.

'€œA [new] Finance Ministry regulation will be issued after an agreement between the government and Freeport is signed. The agreement is about addendum of existing contracts,'€ Chairul said after a meeting related to the issue in his office on Tuesday. '€œThe regulation [...] will be applicable to all eligible parties, meaning those agreeing to build smelters and pay surety bonds, agree to contract addendum. Those who object are subject to the old [Finance Ministry regulation].'€

The government is working to renegotiate mining contracts, which include adjustments on royalty payments, divestment, contract extension, mining size, obligation of local processing and refining activities, as well as the use of local goods and services.

Chairul said last week that government officials would meet Freeport and Newmont senior executives this week to discuss details of the agreement side letters that would make it possible for the mining giants to export their products.

'€œFreeport and Newmont have agreed to build a smelter and they have agreed to deposit certain funds for that purpose as well. It'€™s US$114.8 million for Freeport and $25 million for NNT,'€ Chairul said in a meeting late on Wednesday last week.

The government decided to relax the mineral-ore export ban by introducing progressive export taxes, following threats and complaints from mining companies that claimed the ban would cause substantial losses. (mtq)

Raras Cahyafitri contributed to the story