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JAKARTA, June 3 Newmont Mining Corp said
it has halted copper concentrate production at its Batu Hijau
mine in Indonesia as a deadlock continues over controversial
mining rules that have halted concentrate exports since
Newmont, which said its storage facilities at the mine were
full after the near five-month export halt, said it had delayed
standing down its 8,000 employees and contractors ahead of a
government meeting this week.
The prospect of widespread job layoffs could add to pressure
on the Indonesian government to find a solution to the
stand-off, after weaker exports contributed to slower
first-quarter economic growth and a swelling trade deficit in
Newmont and fellow U.S. miner Freeport McMoRan Copper & Gold
Inc account for 97 percent of Indonesia's copper output.
The two firms are still shipping out some refined copper, but
have halted exports of copper concentrate after objecting to the
imposition of a new escalating tax.
Both firms are expected to hold talks with senior government
officials this week in the hope of breaking the hiatus to copper
Newly appointed chief economics minister, billionaire
businessman Chairul Tanjung, has said he will review the mining
export rules and hopes exports can resume.
"Newmont Nusa Tenggara (PTNNT) today said that its
concentrate storage facilities at Batu Hijau are now full,
forcing the operation to halt processing activities and cease
production of copper concentrate," Newmont said in a statement.
It was "waiting for results of a ministerial meeting this
week that is intended to clarify the conditions under which
copper concentrate exports will be permitted" before sending
home employees and contractors.
A mining union official told Reuters production had stopped
"since two days ago" and the company had not declared force
Freeport said earlier this year it had cut production at its
Grasberg mine in Papua, Indonesia, the world's fifth-largest
copper mine, by around 60 percent and that a force majeure could
be announced if the dispute dragged on.
While Freeport's CEO is expected to come to Jakarta this
week to discuss the deadlock, Newmont's chief executive had no
plans to come to Jakarta at present, PTNNT spokesman Rubi
No further details were available from Freeport or Newmont
about their planned meetings.
Government officials were working to issue a new regulation
to resolve the dispute but needed presidential approval, Finance
Ministry fiscal policy chief Andin Hadianto told Reuters.
The government has targeted copper concentrate exports of
800,000 tonnes this year, provided the deadlock is resolved this
week, a mining ministry official said last week. Of this amount,
Newmont is expected to contribute 250,000 tonnes.
Before the new export rules, Newmont forecast copper
concentrate output for 2014 at 110,000-125,000 tonnes.
(Reporting by Wilda Asmarini, Fergus Jensen, Michael Taylor,
Yayat Supriatna and Nina Kusuma; Editing by Richard Pullin)