Friday, July 25, 2014

US Major Miners Step Forward To Resume the Copper Exports

US Major Miners Step Forward To Resume the Copper ExportsTwo major copper miners of Indonesia said that they were stepping forward to restart the exports of concentrates, which have been banned for more than six months due to the disputes relating new rules.
Due to the export ban, about $200 million per month in copper exports has been halted. Freeport-McMoRan Inc said during Wednesday that it would sign an agreement with Indonesia very soon to restart the copper concentrate export. Newmont Mining corp. also commented that it was in talks for a MoU to restart the delayed shipments.
Freeport on July 8 said that they had also agreed on a MoU with the government of Indonesia but it had not inked it yet. The company did not give the exact time on when they would restart the export.
Chief Executive Richard Adkerson of Freeport said that it was a compromise to form a bridge for them so that they could return to the normal operations. Adkerson said that under the MoU, the company would pay a reduced export duty in 2014, 2015 and 2016 but higher royalties on gold and copper sales.
He added that in terms of MoU, the company would pay a $115 million assurance bond against smelter development. Freeport, which owns the massive Grasberg mine, requires financial aids from the government to construct their own smelter.
Indonesia has imposed an export halt in January due to the disputes relating the new rule that the miners should construct their own smelters in the country. But the miners opposed by saying that building new capacity would not make any economic sense.
Adkerson said that the discussions with the government also involved the agreement to extend the company’s operations beyond 2021, when the present contract expires. As on the new decision, copper on LME was trading flat at $7,043.75 per tonne in early Asian trade.
At the time of trading halt, Newmont has shut down its mining operation at Batu Hijau and filed for an international arbitration. The US major miners contribute about 97 percent of Indonesia’s copper production.
Newmont spokesman Omar Jabara also said that they will also do an agreement with the Indonesian government for issuing the export permit. Widodo, Indonesia’s president-elect said that he was also planning to negotiations with the miners to resolve all the disputes.

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