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opper mining company PT Newmont Nusa Tenggara is currently in talks with several potential partners with whom the miner could jointly build smelters to comply with the country'€™s mineral processing regulation.

Under the potential cooperation deal, Newmont Nusa Tenggara, a subsidiary of US-based Newmont Mining Corporation, would supply its copper concentrate to a smelter developed by the investors.

The mining company is seeking partners because it considers that building its own smelter will not be economical.

The Energy and Mineral Resources Ministry'€™s minerals and coal director general, R. Sukhyar, confirmed that Newmont had conveyed its plan to work with investors for the construction of a smelter in the country.

'€œWe have been informed by Newmont Nusa Tenggara that they have performed assessments with Chinese investors. It seems they are inclined to cooperate with them [Chinese investors] rather than with previous partners like Indosmelt,'€ Sukhyar added.

He was referring to PT Indosmelt, with whom Newmont Nusa Tenggara has signed a conditional sales purchase agreement. Under the agreement, Newmont would supply concentrate to a copper smelter to be developed by Indosmelt.

Newmont also signed a separate agreement with PT Nusantara Smelting Cooperation, which is also planning to develop a smelter. However, none of those plans have shown progress.

Apart from talks with Chinese investors, Newmont Nusa Tenggara, part of whose shares are also owned by PT Bumi Resources Minerals under the Bakrie Group that is related to Golkar party chairman Aburizal Bakrie, is also discussing the issue with local companies.

Among the local companies were reportedly the Hadji Kalla Group, which is related to Vice President Jusuf Kalla who is also a figure in the Golkar party, according to people familiar with the matter.

Hadji Kalla Group corporate communications officer Andi Asmir could not immediately respond to questions seeking confirmation on the company'€™s plan in the mineral smelting business with Newmont Nusa Tenggara.

Newmont Nusa Tenggara president director Martiono Hadianto declined to comment on his company'€™s potential partnership either with the Chinese investors or with Hadji Kalla Group.

Yet, he said the government had called on companies to initiate joint development rather than the individual development of smelters.

'€œThe government'€™s latest guidance is that if we want to establish a smelter, it'€™s better to develop it together,'€ Martiono said after a meeting at the minerals and coal office.

In the implementation of the 2009 Mining Law, the government requires mining companies operating in the country, such as Newmont Nusa Tenggara, to develop smelters '€” either individually or in cooperation with other companies '€” so that they will be able to refine their minerals into end products of metal to be exported.

This is part of the value-added minerals policy regulated by the law, which aims to encourage the mineral downstream industry in Indonesia and help the country to climb the production chain.

The smelter development should have been completed within a five-year period after the law was passed so that the country was able to fully implement the ban on mineral ore exports. However, the deadline has been missed.

The government is currently struggling to encourage companies, particularly Newmont Nusa Tenggara and PT Freeport Indonesia, to establish and accelerate smelter development so the ban on mineral ore exports can be fully implemented in 2017 with only end products of metal able to be exported.

Under current policy, semi-finished products, such as copper concentrate produced by Newmont Nusa Tenggara and Freeport Indonesia, can be exported until 2017.

'€œIf the deadline of 2017 is missed again, there will be a consequence on the regulation, which has to be changed. However, whether an export can continue or not is another issue we have to think about later,'€ Sukhyar said.

The minerals and coal office is currently working on gathering copper concentrate producers, including Freeport Indonesia, Newmont Nusa Tenggara, PT Gorontalo Minerals and PT Kalimantan Surya Kencana, for talks about the long-term plan of production. The companies'€™ plans are necessary because the development of smelters would need certainty on sustainable supplies of concentrate. Sukhyar said he had ordered the company to discuss the possibility of establishing a consortium for smelter development to reduce worry about supplies.