World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search


Freeport and Newmont MoUs Not Enough: Hatta

Freeport and Newmont MoUs Not Enough: Hatta

Indonesia will not exempt US-backed gold miners Freeport Indonesia and Newmont Nusa Tenggara from next year’s export ban despite both mining giants having signed memoranda of understanding to supply their concentrates to local smelters, a senior minister says.

Hatta Rajasa, the coordinating minister for the economy, on Tuesday said the signing of MoUs was not enough to grant miners extensions of the export deadline.

“If the ground breaking is already done and the financial closing has been made, we can consider granting them extensions,” said Hatta, who leads the government’s negotiations with the mining companies.

He said miners would not be allowed to export their commodities without domestic processing. “The mining export ban will still be imposed,” he said.

The government last year asked all miners to submit plans to build refineries or smelters ahead of the deadline for a ban on raw mineral exports in 2014, as part of a series of efforts to add more value to the country’s natural resources and boost state revenue through royalty payments.

But the government never set a deadline for the completion of the smelter projects, prompting expectations that it was open to negotiation.

Freeport, which operates the Grasberg Mine — the world’s second-largest copper mine — in Papua province, is processing a third of its ore in Indonesia via a local company that operated a copper smelter and refinery in East Java.

But the local company was not interested in expanding its facilities after weaker copper prices this year raised the likelihood of slimmer margins.

Freeport has signaled its reluctance to build smelters in Indonesia and voiced concern that the issue has delayed its multi-billion-dollar investment plan to expand Grasberg into underground mining and extend the life of the mine, which is claimed to have the world’s largest gold reserves.

Newmont Nusa Tenggara, which operates the Batu Hijau copper and gold mine in West Sumbawa, West Nusa Tenggara, has signed MoUs with three local smelters — Indosmelt, Indovasi Mineral Indonesia and Nusantara Smelting — to process concentrates.

The three companies have said that they plan to invest billions of dollars to develop the smelters, but no ground has been broken yet.

Martiono Hadianto, chairman of the Indonesian Mining Association, said he hoped the government would relax the export ban for miners, especially the giants such as Freeport and Newmont.

“We need a situation of give and take.”

He said metal miners operating in Indonesia generally already process raw materials domestically before export. The output from this process is called concentrate, which Martiono said represents 90 percent of the minerals’ market value.

Government officials have repeatedly claimed that miners export their output in raw form.

Meanwhile, officials from the ministries of trade, industry, and energy and mineral resources met at Hatta’s office on Tuesday to ensure a unified position on a series of controversial mining contract renegotiations.

Many large miners are engaged in discussions to alter decades-old agreements over royalty payment and government regulations.

The government is seeking to improve its benefits from miners operating under the so-called contract of works, which would affect 111 contract holders.

The 2009 Mining Law stipulates new provisions are required, including higher royalty payments and reducing the limit of the size of mining concession areas and the length of contracts. It also introduces divestiture obligation for foreign-owned miners. But miners say they are excluded from the law because it was passed after they signed contracts.


© Scoop Media

World Headlines


UN: Bachelet Alarmed By Number Of Palestinian Children Killed In Latest Escalation

UN Human Rights Chief Michelle Bachelet today expressed alarm at the high number of Palestinians, including children, killed and injured in the occupied Palestinian territory this year, including in intense hostilities between Israel and Palestinian armed groups in Gaza last weekend... More>>

Save The Children: One Year Under Taliban Rule, Girls Are More Isolated, Hungry, Sad: New Report
One year since the Taliban took control of Afghanistan, an economic crisis, crippling drought and new restrictions have shattered girls’ lives, excluding them from society and leaving them hungry...

Palestinian Ministry of Health: Developments In The Health Situation During The Israeli Aggression On The Cities & Governorates Of The Gaza Strip
For the second day in a row, the Israeli aggression against the Gaza Strip continues by targeting overcrowded residential areas and neighborhoods, as the death toll rose to 13 citizens, including a 5-year-old girl and a 23-year-old woman... More>>

Somalia: ‘We Cannot Wait For Famine To Be Declared; We Must Act Now’
Rising acute food insecurity in Somalia has caused more than 900,000 people to flee their homes in search of humanitarian assistance since January last year, the Food and Agriculture Organization (FAO) has warned... More>>

UN: American West Faces Water And Power Shortages Due To Climate Crisis
Two of the largest reservoirs in the United States are at dangerously low levels due to the climate crisis and overconsumption of water, which could affect water and electricity supply for millions in six western states and Mexico, the UN Environment Programme (UNEP) warned on Tuesday... More>>

Singapore: UN Experts Call For Immediate Moratorium On Executions For Drug Offences

UN experts* today condemned the execution of Nazeri Bin Lajim, a 64-year-old Malay Singaporean national convicted of drug offenses and urged the Government of Singapore to halt plans to execute individuals on death row for drug related charges... More>>