Indonesia Gives Newmont Mining Ultimatum: End Lawsuit Or Else
Just when thing were beginning to look up, the turbulence between Newmont Mining and Indonesia rages on. The country is now threatening to terminate Newmont’s mining contract if the company does not comply and withdraw its lawsuit.
Newmont earlier this month filed an international arbitration over Indonesia’s escalating export tax claiming it violates the company’s mining contracts. Newmont and fellow US miner Freeport-McMoRan Copper & Gold have halted copper exports since January 23.
"By stopping production, they are making our state revenues decline so we can say that they have defaulted," Sukhyar, director general of coal and minerals at the mining ministry said.
"Stopping production is just the same as negligence."
According to Newmont, the company was forced to stop copper production while it waited for an export permit from the government. It also states storage facilities reached full capacity in June.
"PTNNT's contract of work with the government of Indonesia explicitly grants the company the right to export copper concentrate," Newmont spokesman Omar Jabara said.
"As such, PTNNT remains in compliance with the contract of work and is prepared to resume production upon receiving an export permit from the government."
Newmont’s contract could possibly be revoked 90 days if Indonesia’s government declares it to be in default or negligent. Indonesia has also threatened to sue Newmont over breach of contract.
The tax on exports is part of Indonesia’s effort to force miners to build smelters and processing plants in the area. Freeport and Newmont have previously argued the two companies should be excused from the tax as they account for 97 percent of Indonesia’s copper output.
Freeport-McMoRan has had better luck with Indonesia. The company recently agreed on a Memorandum of Understanding (MoU) with Indonesia over its contract renegotiations.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.