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Export permit in limbo as govt demands progress on smelter
The government demands that copper mining company PT Newmont Nusa Tenggara, a subsidiary of US-based Newmont Mining Corp
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he government demands that copper mining company PT Newmont Nusa Tenggara, a subsidiary of US-based Newmont Mining Corp., show progress in supporting the development of a new smelter as a requirement to resume exports.
The company recently extended a memorandum of understanding (MoU) on a partnership to build a copper smelter in the country, but that does not warrant a recommendation for export, said Bambang Gatot Ariyono, the Energy and Mineral Resources Ministry's mineral and coal director general.
'Seriousness cannot be assessed only with an MoU. We want to know when the company will disburse the funds, how much will be invested and in what stage of development [the plans are],' Bambang said.
Newmont Nusa Tenggara has submitted a request for a recommendation from the mineral and coal directorate to resume copper concentrate exports.
The company's request came after it had sealed a deal with fellow copper miner PT Freeport Indonesia on the extension of an MoU regarding a partnership to develop a smelter in Gresik, East Java.
Bambang said that the mineral and coal directorate would continue to evaluate Newmont Nusa Tenggara's request for export recommendation over the next one to two months.
'We will never give a recommendation as long as the company is unable to meet the requirements,' he added.
Newmont Nusa Tenggara's export permit expired on Sept. 22. While a new permit has not been secured, the company is likely still in production, but only to fill its stockpiling facility, according to Bambang.
The company is saying that it has met all of the requirements to obtain the export permit.
'Newmont Nusa Tenggara has completed all requirements from the government to obtain the export recommendation and permit, including by submitting a more detailed MoU extension with Freeport Indonesia related to the development of a new facility by Freeport. We are expecting to obtain the export permit from the government immediately,' Newmont Nusa Tenggara spokesman Ruby Purnomo said earlier this week.
Under the 2009 Mining Law, mining companies are barred from exporting mineral ore unless they process their products before shipping them overseas. The government has specified processing and refining levels that companies must achieve in order to get export permits.
Copper concentrate, however, is one exception, where the government allows concentrate exports until 2017. From then on, only companies with a commitment to build processing or refining facilities are allowed to continue selling concentrate, which is considered by the government to be a semi-finished product.
Freeport Indonesia recently obtained an extension of its export permit by another six months after it showed progress on its smelter development in Gresik. However, the company never revealed details on its planned partnership with Newmont Nusa Tenggara.
Apart from a sealed MoU with Freeport Indonesia, Newmont Nusa Tenggara, which operates the Batu Hijau copper mining site in West Nusa Tenggara, has also signed MoUs with other companies. However, no progress is reported to follow up the MoUs.
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