| JAKARTA/SYDNEY, June 3
JAKARTA/SYDNEY, June 3 Indonesia's copper
industry is pinning its hopes on one of the country's richest
businessmen to help restart concentrate exports worth hundreds
of millions of dollars, halted nearly five months ago over a
With no obvious immediate political ambitions, billionaire
Chairul Tanjung who was appointed in May as chief economics
minister, is seen as more likely than his predecessor to reach a
politically unpopular compromise with foreign miners, although
he will still need the support of the president.
Adding to pressure for a deal, Newmont Mining Corp,
one of two big foreign copper miners in Indonesia, said on
Tuesday it has halted production of copper concentrate at its
Batu Hijau mine after its stockpiling facility reached capacity.
Newmont said it would await the outcome of government talks
this week before deciding whether to stand down workers.
Tanjung is also due this week to meet Freeport-McMoran
Copper & Gold Inc chief executive Richard Adkerson.
Indonesia on Jan. 12 introduced a ban on ore exports and
levied an escalating tax on concentrate exports as part of
efforts to force miners to build smelters and processing plants
in Southeast Asia's largest economy.
The new tax halted about $500 million worth of monthly
mineral ore and concentrate exports and led Freeport and
Newmont, who account for 97 percent of the country's copper
output, to slash output as both say the rules conflict with
Indonesian President Susilo Bambang Yudhoyono last month
chose Tanjung to replace former chief economics minister Hatta
Rajasa, who is running for vice president in July's presidential
Tanjung said he would review the mining export rules after
they hampered first-quarter economic growth, which grew at its
slowest in more than four years. On Monday, sliding exports
pushed April's trade deficit to its second-largest in five
"I have high expectations and hope," said Tony Wenas, former
CEO of Vale Indonesia and a board member of the
Indonesian Mining Association. "He is a practical and pragmatic
businessman when dealing with things - he is not a bureaucrat."
A trained dentist, Tanjung, 51, was ranked as Indonesia's
fifth richest man by Forbes with a net wealth of $4 billion. His
company CT Corp now operates two of the country's top five TV
stations and has retail and banking interests.
Tanjung, who could not be reached for comment, has little
time to make big policy changes as the current government's role
in policy-making effectively ends in July, with a new government
due to take over in October.
"Tanjung is a very can-do, business oriented guy," said an
Indonesian-based mining company executive, who declined to be
identified due to the sensitivity of the issue.
"He's already been in to see Freeport and he's concerned
about the possibility of job losses in terms of people being
laid off by them and Newmont, plus no tax receipts for as long
as the export ban remains in place.
"He'll bang some heads together and the concentrate will
start flowing again before the new government forms, which
previously I thought was only a 50/50 proposition at best."
Neither Newmont nor Freeport could not be reached for
The mining association's Wenas said he expected any
breakthrough would centre on an escalating export tax introduced
by the government, as well as long-running mining contract
renegotiations with both Freeport and Newmont.
The two miners argue they should be exempt from the export
tax, which kicks in at 25 percent and rises to 60 percent in the
second half of 2016, before a total concentrate export ban in
2017, saying their current contracts prohibit any extra taxes.
Although both Newmont and Freeport have questioned the
economic viability of building new copper smelters in Indonesia,
the latter has agreed to study the possibility of building a
copper smelter with state-owned miner Aneka Tambang.
Tanjung told reporters last month he would report the
results of talks with major miners to the president, and adopt a
long-term approach in negotiations.
Details on what changes may be made to the export tax are
not known, but last week Tanjung said the government would draft
a new finance ministry regulation with separate requirements for
miners making progress in the construction of smelters.
This would need to be approved by cabinet and President
Yudhoyono, he said, adding that the government hoped exports
would resume after this week's talks.
Copper prices have risen in recent months, trading around
$6,893 a tonne on Tuesday, as an expected production surplus has
has yet to materialise and LME and Shanghai stocks have
(Additional reporting by Fergus Jensen, Yayat Supriatna,
Fathiya Dahru, Nila Chrisna and Adriana Nina Kusuma; Editing by