London 05/06/2014 - Newmont mining company has suspended operations at its Batu Hijau copper mine in Indonesia and declared force majeure on concentrate shipments, it said on Thursday.
PT Newmont Nusa Tenggara (PTNNT), the group's joint venture in Indonesia, "officially notified the government and employees that it is invoking the force majeure clause of its Contract of Work (CoW) due to ongoing export restrictions that prevent production from continuing," it said in a release.
Approximately 80 percent of Batu Hijau's 4,000 employees will be placed on leave at reduced pay starting on June 6.
The company had already halted processing and production on June 3 but delayed declaring force majeure and cutting workforce in anticipation of a ministerial meeting this week.
“We have taken numerous steps to help resolve the export issue and support the government’s desire to increase in-country smelting. However, despite our best efforts, we have not been able to export copper concentrate since January, and we still do not have an export permit," it said.
Newmont continues discussions with the government and has asked to be allowed to continue exporting copper concentrate based on the existing terms of the CoW (no export duty) until the issue is resolved.
PTNNT will continue selling copper concentrate from storage to PT Smelting in Gresik, which is majority owned by Freeport McMoran. This will allow for the shipment of 81,000 tonnes of concentrate between now and the end of the year, it said.
PTNNT is 56 percent owned by Nusa Tenggara Partnership (which is owned by Newmont Mining Corp and Nusa Tenggara Mining Corporation of Japan), although seven percent may be divested to the Government of Indonesia.
The remaining 44 percent are in the hands of Indonesian companies: PT Pukuafu Indah (17.8 percent), PT Multi Daerah Bersaing (24 percent) and PT Indonesia Masbaga Investama (2.2 percent).
Newmont and Freeport have not shipped concentrate from Indonesia since the introduction of the mining law on January 12.
(Editing by Kathleen Retourne)