Jakarta. Indonesia has reached a deal over export taxes with US mining company Freeport-McMoRan Copper & Gold, allowing nearly $4 billion worth of annual copper shipments to resume as early as next month.
Freeport and fellow US miner Newmont Mining Corp have halted copper concentrate shipments since January, refusing to pay an escalating export tax that they say breaches their contracts.
The export tax was introduced as part of a series of mining rules, which include a mineral ore export ban, to force companies to build smelters and process raw materials in Indonesia.
“We have solved the problem,” Deputy Finance Minister Bambang Brodjonegoro said at the Reuters Association of Southeast Asian Nations (Asean) Summit. “We will link the export tax, which is more like an export fee, on to the progress of the smelter development.”
To win a tax reprieve, Freeport agreed to pay the government a 5 percent security bond to build a smelter and sign supply agreements with smelter-building companies, Brodjonegoro said.
The final government regulation is expected to be published in the next few weeks, allowing Freeport to resume exports by the end of next month, he said, from the world’s fifth-largest copper mine in remote Papua.
“We are continuing to work with government officials to seek a resolution to these matters as soon as practicable so that normal operations can resume without adverse impacts to our workforce, the local community and our customers,” Freeport spokesman Eric Kinneberg said in an email.
Shares of Freeport ended 2.3 percent higher at $32.41 on the New York Stock Exchange.
Any mining company that takes action similar to Freeport’s will also be given a reprieve from the tax, which is set at 20 to 25 percent this year and rises to as much as 60 percent by the second half of 2016.
Newmont, which owns the smaller Batu Hijau copper-gold mine in Indonesia, was continuing to work with the government to try to secure a six-month export permit, company spokesman Omar Jabara said.
Newmont was also in talks, along with Freeport, around supplying copper concentrate to a proposed smelter that Indonesian state-owned miner Aneka Tambang, or Antam, is considering building in the country, Jabara said.
Earlier on Thursday, a trade ministry official said it had approved Freeport’s export certification but that it would still need approvals from the mining and finance ministries.
Freeport has reduced copper production at the mine in Papua by 60 percent, and its nearby mill was operating at half its normal capacity, due to the tax dispute.
— Additional reporting by Rieka Rahadiana and Wilda Asmarini in Jakarta and Nicole Mordant in Vancouver
2) TIMIKA TENSE AFTER DEATH OF TWO RESIDENTS
Timika, 27/3 (Jubi) – The killings of two residents of Mulia Kencana Village (SP7) of Iwaka Sub-district by an unidentified group has sparked fears among residents in Timika.
Several shops and kiosk were half-door opened because of the owners were worried that a tribal war could break out again.
Two men identified as Bernadus Douw and Yulius Pigome were found dead (KAPAN?). Douw was an employee at the Jayasakti Mandiri Foundation, which operate a farming business at Utikini Baru Village (Sp12). Their bodies have been evacuated to the Mimika State Hospital for examination.
The victims were riding their motorcycles from Limau Asri Village (SP5) to their home in SP7 beforre when they were ambushed and killed.
Residents said the had never been involved in tribal clashes between Dani and Moni communities in Djayanti-Mayon because they belonged to the Mee tribe.
Angered by the killings, members of the Mee community gathered and blocked the road in the Timika Indah area. The victims’ families said the murder case must be immediately resolved through religious, customary and state laws so that the ongoing conflict in Djayanti-Mayon that has already claimed several lives could end.
“The point is we who represent the Customary Institution asked Dani’s Tribal Chief in Mimika Regency to meet the Mee’s Tribal Chief in order to have the same perception. We want the religious, customary and state laws would be equally enforced,” said Paskalis Douw on Thursday (27/3).
The latest killings has brought the number of fatalities linked to the disputes in Djayanti to nine.
Meanwhile, a Timika resident, Selvie said she was concerned about the deadly conflict. She hoped the perpetrators could be brought to justice and the killings would stop. The police remained on guard at Timika Indah Ground and the local council of Mimika as well as some vulnerable to prevent clashes. (Jubi/Eveerth/rom)