REPUBLIKA.CO.ID, JAKARTA - The Indonesian government and PT Newmont Nusa Tenggara (NTT) have signed a point-to-point contract renegotiation agreement on mining at Batu Hijau, West Nusa Tenggara. The president director of Newmont  Martiono Hadianto, stated that the company could resume gold and copper concentrate exports following the signing of the deal.

"Production will start immediately, and laid-off workers have been called back," he said, adding that he hoped exports to resume next week.

The agreement signed on Wednesday is in the form of a memorandum of understanding (MoU) on contract amendment, but later it will be followed by signing of a special mining permit as replacement of the working contract. Martiono predicted that the discussion of contract amendment will last six months.

The MoU contains hike in gold, silver, and copper royalties from 1, 1, and 3.5 percent to 3.75, 3.25, and 4 percent, respectively, in line with Government Regulation No. 9 of 2012 on non-tax state revenues. Under the agreement, Newmont will also be required to pay a dead rent of 2 USD per hectare and build a smelter, pay an assurance of 25 million USD, have its mining area reduced from 87,000 hectares to 66,422 hectares, conduct divestment of 51 percent, and use domestic products.

In line with the finance minister's regulation, Newmont will be imposed a concentrate export tax of 7.5 percent. The export tax will be reduced to five percent if smelter development reaches 7.5 percent and zero percent if development reaches above 30 percent.

"No changes have been made to the working contract provisions except export tax, guarantee on assurance to build smelter, royalty, and fixed contribution before contract renegotiation is agreed upon," he pointed out.

Newmont had halted production following the issuance of Law No. 4 of 2009 on concentrate export ban. Due to the ban, the US company had filed a lawsuit at the International Center for Settlement of Investment Disputes because of which the Indonesian government had threatened to end contract renegotiation.

Newmont finally withdrew its lawsuit and continued the process of renegotiation. The company had signed the 4th Generation of Working Contract on December 2, 1986.

A total of 56 percent of the company's shares are held by Nusa Tenggara Partnership BV controlled by Newmont Mining Corporation and Nusa Tenggara Mining Corporation of Japan. Other shareholders include PT Pukuafu Indah (17.8 percent), PT Multi Daerah Bersaing (24 percent), and PT Indonesia Masbaga Investama (2.2 percent).

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