Jakarta. The Energy and Mineral Resources Ministry said it is willing to extend a permit for US gold and copper miner Newmont Nusa Tenggara, or NNT, to continue to export gold concentrate if the company files such a request.

NNT is currently operating on a six-month gold concentrate export permit, which expires in March.

The ministry’s director general for minerals and coal R. Sukhyar said that a permit extension can be given based on the miner’s progress toward building a domestic smelter.

Freeport Indonesia, the local unit of US mining giant Freeport-McMoRan, secured last month a six-month extension of its export permit, after the company rented land in Gresik, East Java, on which it said it would build a copper smelter.

“Since Freeport has been granted an export permit extension, NNT would also [get one],” Sukhyar said in Jakarta on Tuesday.

However, Sukhyar said the ministry would not automatically issue the permit; NNT has to request it.

NNT had said in September that it would supply its copper concentrate to Freeport Indonesia’s smelting facility.

The government asked Newmont to explore the possibility of building its own copper smelter. NNT had deposited $25 million as collateral toward its commitment to domestic refining.

However, NNT’s general supervisor for  site communication Ruslan Ahmad recently said that the company could not build its own smelter due to its inconsistency of concentrate production and the lack of infrastructure in Batu Hijau, Sekongkang district, West Nusa Tenggara.

“We are ready to support [a smelter]. The proof is the $25 million guarantee,” Ruslan said.

According to a 2014 decree by the energy and mineral resources minister (“Number 11”), requests for a permit extension should be filed no more than a month before its expiration date.

The government says it will issue a six-month concentrate export permit that can be extended for a further six months.

NNT’s concentrate export permit is slated to expire on March 18.

In early June 2014, NNT invoked a force majeure clause in its contract of work, effectively halting operations “due to ongoing export restrictions that prevent production from continuing.”

The company was referring to the newly implemented 2009 Mining Law’s ban on ore exports for mining companies that had not yet built domestic smelters, a requirement aimed to add value, as well as technical capacity, to resources extracted in-country.

The move halted mining activity at NNT’s site in Batu Hijau and caused the company to furlough 80 percent of its 4,000 employees.

Investor Daily

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Source: The Jakarta Globe