(Adds Newmont response, Freeport closing share price)
By Randy Fabi and Yayat Supriatna
JAKARTA, March 27 Indonesia has reached a deal
over export taxes with U.S. mining company Freeport-McMoRan
Copper & Gold Inc, allowing nearly $4 billion worth of
annual copper shipments to resume as early as next month.
Freeport and fellow U.S. miner Newmont Mining Corp
have halted copper concentrate shipments since January, refusing
to pay an escalating export tax that they say breaches their
The export tax was introduced as part of a series of mining
rules, which include a mineral ore export ban, to force
companies to build smelters and process raw materials in
"We have solved the problem," Deputy Finance Minister
Bambang Brodjonegoro said at the Reuters ASEAN Summit. "We will
link the export tax, which is more like an export fee, on to the
progress of the smelter development."
To win a tax reprieve, Freeport agreed to pay the government
a 5 percent security bond to build a smelter and sign supply
agreements with smelter-building companies, Brodjonegoro said.
The final government regulation is expected to be published
in the next few weeks, allowing Freeport to resume exports by
the end of next month, he said, from the world's fifth-largest
copper mine in remote Papua.
"We are continuing to work with government officials to seek
a resolution to these matters as soon as practicable so that
normal operations can resume without adverse impacts to our
workforce, the local community and our customers," Freeport
spokesman Eric Kinneberg said in an email.
Shares of Freeport ended 2.3 percent higher at $32.41 on the
New York Stock Exchange.
Any mining company that takes action similar to Freeport's
will also be given a reprieve from the tax, which is set at 20
to 25 percent this year and rises to as much as 60 percent by
the second half of 2016.
Newmont, which owns the smaller Batu Hijau copper-gold mine
in Indonesia, was continuing to work with the government to try
to secure a six-month export permit, company spokesman Omar
Newmont was also in talks, along with Freeport, around
supplying copper concentrate to a proposed smelter that
Indonesian state-owned miner PT Aneka Tambang, or Antam, is
considering building in the country, Jabara said.
Earlier on Thursday, a trade ministry official said it had
approved Freeport's export certification but that it would still
need approvals from the mining and finance ministries.
Freeport has reduced copper production at the mine in Papua
by 60 percent, and its nearby mill was operating at half its
normal capacity, due to the tax dispute.
(Additional reporting by Rieka Rahadiana and Wilda Asmarini in
Jakarta and Nicole Mordant in Vancouver; Editing by Himani
Sarkar, Jane Baird, Bernadette Baum and Meredith Mazzilli)