|Failure of current discussions with the Indonesian government to obtain an export permit was expected to result in the suspension of production at the Batu Hijau copper-gold mine in early June.|
PT Newmont Nusa Tenggara (PTNNT) announced on May 7 that the Batu Hijau copper and gold mine on Sumbawa Barat, Indonesia, would ramp down production on or about June 1, unless ongoing discussions with the government led to completion of the process to secure an initial export permit. In April, PTNNT obtained registered exporter status from Indonesia’s Ministry of Trade, a necessary milestone prior to receiving the export permit.
Batu Hijau’s copper-concentrate storage facilities were due to be filled to capacity by late May. Once they were filled, PTNNT would cease mining and milling, along with significantly scaling back contracted services, purchasing, and capital expenditure, with corresponding adjustments in employee work schedules and reductions in overtime.
To minimize expenses and preserve the ability to return to normal operations in a timely fashion, most of PTNNT’s employees would be placed on leave at reduced pay starting in early June. The mine would maintain appropriate controls to protect the safety and security of people, water resources, and the environment.
PTNNT President Director Martiono Hadianto said, “While our contract of work explicitly guarantees our right to export copper concentrate and establishes all the taxes and duties PTNNT is required to pay, we have taken numerous steps to support the government’s desire to increase in-country smelting. This is a very unfortunate and difficult situation for all of us, as it will disrupt the lives of our 8,000 employees and contractors and impact thousands more people in the Sumbawa Barat area who derive their incomes from our operation.”
Batu Hijau will continue shipping and selling copper concentrate to PT Smelting in Gresik, Indonesia, through the remainder of 2014; however, the Gresik smelter has capacity limitations and cannot purchase sufficient quantities of PTNNT’s copper concentrates to allow for ongoing normal production at Batu Hijau.
Batu Hijau produced 161 million lb of copper and 48,000 oz of gold in concentrate in 2013.