Newmont Suspends Operations at Batu Hijau

Following through on its announcement in early May that it would suspend mining and concentrate production at the Batu Hijau copper and gold mine on Sumbawa Barat, Indonesia, if it did not secure a permit to export copper concentrates (E&MJJune 2014, p. 30), PT Newmont Nusa Tenggara (PTNNT) on June 5 began the shut-down process. Approximately 80% of Batu Hijau’s 4,000 employees were placed on leave at reduced pay, and mining and processing operations were placed on care and maintenance.

The government of Indonesia placed a ban on the export of copper concentrates by PTNNT and Freeport Indonesia in January. PTNNT continued to produce concentrates until its concentrate storage facilities were full, but with no resolution to the export ban, had to suspend production. Freeport Indonesia has been producing at about half of its capacity. Both companies ship concentrates to PT Smelting’s Gresik smelter in Indonesia, but the smelter does not have the capacity to handle all of their production.

Talks between the government and the companies were ongoing, but as of late June, a near-term resolution to the stand-off regarding the export of copper concentrates from Indonesia did not appear to be forthcoming.

As featured in Womp 2014 Vol 07 -