Indonesia reported that Newmont Mining Corp (NYSE:NEM) is running out of time to get new export permit. The company’s Indonesian copper export permit will be renewed only when the U.S. miner firm provides a progress update to Indonesian government on its plans to advance a domestic smelter.
Newmont, the second-largest copper miner firm in Indonesia, reached a deal with the government a year ago to establish local mineral processing facilities to conclude an 8-month tax clash that brought the exports to a standstill. The past month witnessed several output cuts at copper mines as the prices stuck at six-year lows, and a continued export stoppage at company could help support prices.
Bambang Gatot, the Director General of Coal and Minerals at the ministry, said that Newmont has not provides any updates on domestic smelter. If the company doesn’t provide it, they will not get a approval for an export permit. Newmont would require necessary approval from ministry before an export permit can be issued by the nation’s trade ministry.
Indonesia had imposed a massive export tax last January as part of plan to force all miner firms to establish domestic smelters, which would result in bigger returns for the Indonesian government from its mineral resources. Indonesian government expects Newmont to produce 500,000 tonnes of gold and copper concentrate in 2015, up from 400,000 tonnes last year.
Newmont experienced similar issues getting a new six-month permit approval from the Indonesian government in March 2015. The multiple studies prove that company’s Batu Hijau mine cannot maintain a smelter on its own. Therefore, the government has urged Freeport-McMoRan Inc (NYSE:FCX) and Newmont to work jointly on a new domestic smelter. Freeport has witnessed its exports hindered in August due to new payment rules introduced for buyers, the El Nino weather pattern and the closure of its domestic smelter.
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