Newmont May Choose To Stop Operation In NTB

Mataram, W Nusa Tenggara, Oct 4 (Antara) - PT Newmont Nusa Tenggara (NNT) has threatened to stop its gold and copper mining operation in West Nusatenggara if it was not allowed to export its copper in concentrate. The government has issued a regulation banning exports of raw minerals in 2014 to force mining companies to process their minerals in the country. Under the regulation mineral producers are required to either build their own processing plant or have their minerals processed in processing facility of other company. The US company has big gold and copper mines in Batu Hijau, West Sumbawa in the province of West Nusa Tenggara developed since 1986. The government regulation banning export of raw minerals is aimed at increasing exports of mineral products in higher value and to create more jobs. The threat, however, made in an internal memo signed by its president director Martiono Hardianto addressed to the company workers. The memo said that PT NNT would abandon and close the mines if the government is determined to implement its regulation which requires the company to process its copper minerals starting January 12 next year. Processing of the mineral is to reach a metal purity of almost 99 percent before being allowed to be exported. So far PTNNT has exported copper concentrate with a purity of 20-30 percent. PT NNT may choose to stop its operation in Batu Hijau rather than having to build a smelter. The company could use a copper smelter in Gresik, East Java, which has been used by Freeport Indonesia, another US cooper mining company operating in Papua. However, it is impossible for PTNNT to use the Gresik smelter as its processing capacity is too small or around 30 percent of the total production of PTNNT, secretary of the Commission I of the West Nusa Tenggara regional legislative assembly Ruslan Tarmuzi, said "The smelter has a processing capacity of less than 2 million tons as against Newmont`s annual production of up to 5,000 tons of copper concentrate," Ruslan said. Chairman of the Commission IV of the Sumbawa district legislative assembly Sambirang Ahmadi regretted PTNNT failure to act immediately on the regulation to build its own smelter in Sumbawa to process its relatively large production of gold and copper minerals. "Why PT Newmont is too slow in complying with the regulation No. 4 issued in 2009. The time given is long enough, around 5 years for the company to build a smelter," Ahmadi said. PTNNT should have taken preparation immediately after the regulation was issued and thought the consequence of delaying to act on it, he said. "What we often heard is that PTNNT is confident it would continue to operate for the next 30 years. Therefore, we are surprised to hear talk about stopping operation and abandoning the mine," he said. Some of the miners also expressed concern with the prospect of losing jobs in 2014 as indicated in the internal memo. Local people whose business has profited from the operation of the company are also worried that they could not continue their business. "The company places the government in great dilemma. Closing the company would mean sending many people losing their jobs. Allowing it to continue operation would be against the rule it has made," the district legislator said. He said he hopes that a solution that would save everyone`s interest could be found in the remaining months before the regulation is effective. The solution could be made only by the central government, he said. Ahmadi, however, said even if PTNNT would finally stop operation the impact would not be too damaging on Sumbawa although many people would lose their jobs. In fact many of the workers are on contract and many of them already ended their contract recently, he said. He said Newmont`s contribution to the district`s gross regional income is relatively small, adding the agriculture , service and trade sectors are still dominant. "The mining sector is not yet the main driver for Sumbawa`s economic development," he said. He said if PT NNT did finally stop operation in Sumbawa, the district administration could help develop smallholders` mines as an option in line with the law on minerals and coal. Meanwhile, chairman of the West Nusatenggara Federation of Indonesian Fishermen and Farm Workers (FSNTBI)Ahmad Syarif Husain said if PT NNT opted to stop operation it would serve a good momentum to start nationalization in the mining sector. PT NNT would make easier the process of nationalization, Husain said.