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By Yayat Supriatna and Wilda Asmarini
JAKARTA, June 13 Indonesian government officials
met with major foreign copper miners on Friday, with the chief
economics minister hoping a quick deal can be reached to
overcome a controversial tax that has halted concentrate exports
for five months.
Richard Adkerson, the CEO of Freeport McMoRan Copper & Gold
Inc and Newmont Mining Corp CEO Gary Goldberg
are in the capital Jakarta, signalling a fresh effort to reach a
settlement over the export tax that the miners say they should
not have to pay.
The tax is part of a government drive to force miners to
build smelters and processing plants in Southeast Asia's largest
economy, but a lack of progress in resolving the dispute has led
Newmont to declare force majeure and Freeport to slash output.
"We hope this happens quickly, everyone wants it to happen
quickly," said chief economics minister and billionaire
businessman Chairul Tanjung, who is spearheading a new
government push aimed at brokering a deal.
Asked about a possible timeframe, Tanjung said: "As quickly
as possible but we mustn't rush."
Both Freeport and fellow U.S.-based copper and gold miner
Newmont have argued they should be exempt from the 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.
They say their current contracts prohibit any extra taxes.
The two miners account for 97 percent of Indonesia's copper
output, with concentrate exports having now been halted for the
past five months.
Freeport was working with the government in an effort to
find a solution, said company spokeswoman Daisy Primayanti.
Newmont was unable to give any immediate comment.
The two parties are also discussing the miners' contracts,
with Freeport seeking a contract extension beyond 2021 before
agreeing to invest more than $15 billion to turn its Grasberg
complex into an underground mine after 2016.
Tanjung said on Friday he hoped for a conclusion on the
contract talks by the end of the month, which could potentially
pave the way for a deal on the export tax.
Government officials reiterated that both Freeport and
Newmont have agreed to pay the export tax, with the percentage
likely to be tied to progress made in smelter construction.
However, the extension of Freeport's miner's contract beyond
2021 appears to now be a key stumbling block.
Government officials say Freeport can only renew its
contract in 2019 at the earliest, but are consulting legal
experts to see whether there is room for manoeuvre.
A legally binding Memorandum of Understanding (MoU) with
Freeport is being suggested by the government as one way to
bypass the extension issue, although the validity of such a
document may be a concern for Freeport.
An extension to Newmont's deal, which ends in 2030, is not
under discussion in the talks, Coal and Minerals Director
General Sukhyar said on Friday. The main issue of concern was a
proposed increase in royalty percentages paid to the government.
(Additional reporting by Fergus Jensen; Writing by Michael
Taylor; Editing by Richard Pullin)