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T Newmont Nusa Tenggara (NNT) is currently in talks to renew its agreement with Freeport Indonesia regarding their plan to cooperate on developing a smelting plant in order to secure a new export permit, which expires Tuesday.

The director for minerals at the Energy and Mineral Resources Ministry'€™s mineral and coal directorate general, Mohammad Hidayat, said on Tuesday that the two companies were currently in talks to extend the validity of their memorandum of understanding (MoU) on the smelter facility development.

'€œWe have received information that Newmont and Freeport are still discussing the extension of their MoU. Both parties have an interest in this matter, so it'€™s their choice whether to accelerate it,'€ Hidayat said on Tuesday.

The renewal of the MoU is necessary for NNT, a subsidiary of the US-based Newmont Corporation because it is part of the requirements it must meet in order to be able to get a recommendation from the Energy and Mineral Resources Ministry to obtain an export permit from the Trade Ministry.

Based on the recommendation, Newmont was granted a six-month export permit, which will be valid until Sept. 22.

As required by the 2009 Mining Law, the government introduced a ban on the export of mineral ore starting from January 2014. However, it is still allowing the exports of semi-finished products, such as copper concentrate, until 2017 in return for the companies'€™ commitment to develop processing or refining facilities to process the minerals into metal end products. The smelter can be built by the company itself or in partnership with other companies.

As part of its attempt to meet government requirements and secure export permits, Newmont Nusa Tenggara, a subsidiary of US-based Newmont Mining Corp., has previously signed a number of MoU agreements with several other firms planning to develop smelter facilities, such as PT Nusantara Smelting, PT Indosmelt and PT Indovasi Mineral Indonesia.

The MoU agreement covered commitments to supply copper concentrate to the planned smelters. However, no progress has been reported. In a similar move, the company also has a deal with Freeport Indonesia on a partnership of the latter'€™s smelter project in Gresik, East Java. The MoU between the companies, which is an extension of a previous MoU, will be valid until Sept. 30.

Newmont Nusa Tenggara spokesperson Ruby Purnomo did not immediately respond a text message seeking comments on his company'€™s MoU with Freeport Indonesia. However, Freeport Indonesia said that it had committed to establish a new smelter in Gresik.

'€œWe have committed to establish a smelter,'€ Freeport Indonesia'€™s spokesperson Riza Pratama said.

Freeport Indonesia, a subsidiary of US-based Freeport-McMoRan Inc., last July secured an extension of export permits from the government after frantic efforts to assure the government that it has made progress with its smelter development. The company, which operates the Grasberg mine in Papua, is planning to build a new smelter in Gresik, East Java, near an existing copper smelter operated by PT Smelting Gresik.

Freeport Indonesia also received some respite by having to pay a lowered export duty, thanks to the minor progress of the smelter'€™s development.
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