PT Newmont Nusa Tenggara (NNT) has received its export permit and anticipates copper concentrate shipments from the Batu Hijau Copper-Gold Project on Sumbawa Island, Indonesia, to resume shortly.
Ramp-up operations have been under way since early September, following signing of a Memorandum of Understanding (MoU) with the Government of Indonesia, and planned milling and mining levels are expected to be achieved during October.
All employees and contractors necessary to maintain normal operations are being recalled in stages and will go through refresher safety training and reintegrated into their roles over the next six to eight weeks.
“For the more than 8000 employees and contractors at Batu Hijau and their families, the resumption of operations marks an important milestone in restoring their livelihoods, as well as supporting the economy of the Sumbawa Barat region,” said PT NNT president director Martiono Hadianto.
“We want to thank all of our employees for their continued support and patience during this difficult period, and we appreciate the government working with PT NNT to finalize the MoU and issue the export permit.”
Effective with the signing of the MoU and receipt of an export permit, PTNNT agreed to pay export duties set forth in a new regulation issued in July 2014, provide a $25 million assurance bond to demonstrate its support for smelter development, and pay royalties of 4% for copper, 3.75% for gold, and 3.25% for silver.
The MoU agreed to with the government outlines a mutual understanding on the six key elements of the Contract of Work (CoW) renegotiation, which will be incorporated into an amendment of the CoW. The areas are: concession area size; royalties, taxes and export duties; domestic processing and refining; ownership divestment; utilization of local manpower, domestic goods and services; and duration of the CoW.
The Batu Hijau mine was developed under an investment agreement called the Contract of Work (CoW). These Contracts of Work were designed to provide assurance and stability to encourage significant, long-term investments, which is why they were endorsed by Parliament and approved by the President of Indonesia.
PTNNT supports the Government’s strategy to increase domestic processing and has an MoU to participate in a process with PT Freeport Indonesia designed to lead towards the development of a smelter. The company also has negotiated and signed conditional concentrate supply agreements with two Indonesian companies that publicly announced plans to build their own copper smelters in the country.
Batu Hijau is a large, surface mine operation, primarily producing copper and small amounts of gold and silver. Originally discovered in 1990, commercial production began in 2000. The mine is in the southwest region of Sumbawa, in the District of Sekongkang, West Nusa Tenggara Province.