(Adds details on exports, context)
By Wilda Asmarini
JAKARTA, Sept 4 Newmont Mining Corp has
signed a deal with the Indonesian government that will allow for
the resumption of copper concentrate exports next week, the head
of the firm's local unit said on Thursday, ending an eight-month
Newmont halted shipments in January after the government
imposed a hefty export tax that the U.S. firm said violated its
mining contract. It declared force majeure at its Batu Hijau
copper mine on the remote Sumbawa island in June and filed for
international arbitration in July.
"We have signed an MoU last night," Newmont's Indonesian
Chief Executive Martiono Hadianto told reporters. "We will start
exports early next week. We will call back our workers who have
been laid off and prepare to produce again."
Newmont, Indonesia's second largest copper producer, is
expected to ship around 200,000 tonnes of copper concentrate for
the remainder of the year, said Sukhyar, director general of
coal and minerals for the mining ministry.
The signing of the Memorandum of Understanding comes a
little more than a week after Newmont withdrew its international
arbitration filing against the government.
The legal challenge severely tested the relationship between
the two sides, with outgoing president Susilo Bambang Yudhoyono
criticising the company's methods.
Newmont agreed to pay a $25 million assurance bond for the
building of an Indonesian smelter with fellow U.S. miner
Freeport-McMoRan Inc. Newmont will also pay a 3.75
percent royalty on gold and 4 percent for copper, up from 1
percent and 3 percent previously.
Freeport, Indonesia's top copper producer, resumed exports
last month after clinching a similar deal.
The government has agreed to significantly reduce its export
tax on concentrates to 7.5 percent from 25 percent this year for
companies building smelters.
Jakarta imposed the export tax in January as part of an
effort to force all miners to develop local mineral-processing
facilities, which would bring bigger returns to Indonesia from
its mineral resources.
Mining industry executives in Indonesia initially balked at
the idea of developing downstream industries and building
smelters, citing a lack of power and infrastructure in remote
areas where mines are often located.
(Additional reporting by Fergus Jensen and Michael Taylor;
Writing by Randy Fabi; Editing by Himani Sarkar and Richard