Newmont Mining Files Arbitration over Export Restrictions in Indonesia
Newmont Mining has filed an international arbitration over export restrictions in Indonesia following the company’s force majeure in June.
Newmont, which has suspended all operations at its Batu Hijau copper mine in Indonesia, is fighting with the Indonesia government over an escalating export tax imposed in January. The company and follow miner Freeport-McMoRan Copper & Gold Inc. say the tax violates its current mining contracts with the country.
“Despite our best efforts over the last six months to resolve the export issues through good faith commitments to support the Government’s policy, PTNNT has been unable to convince the Government that our CoW should guide resolution of our differences,” said Martiono Hadianto, President Director of PTNNT.
In the filing made with the International Center for the Settlement of Investment Disputes, PTNNT (PT Newmont Nusa Tenggara) state their intention to request interim, injunctive relief to allow PTNNT to resume exporting copper concentrate so that Batu Hijau operations can be restarted.
“As a result, PTNNT and its shareholders are left with no option but to seek relief through international arbitration to ensure our stakeholders’ jobs, rights, and interests are protected. We want continued dialogue with the Government to lead to a resolution outside of arbitration. In the meantime, we have an obligation to protect the value of Batu Hijau and the thousands of jobs it provides, as we are still unable to export copper concentrate due to the regulations.”
The tax on concentrate exports is part of Indonesia’s outgoing drive to force miners to build smelters and processing plants in Southeast Asia’s largest economy. Global prices for copper, however, continue to be rattled by the disruption to supplies from Indonesia.
Indonesia’s coal and minerals director general, Sukhyar, said he regrets the action Newmont has taken and believes the government will seek to resolve it.
"It's not the end of the world ... automatically our renegotiation of CoW talks will temporarily be stopped," said Sukhyar, referring to the long-running contract renegotiations between the government and Newmont.
Newmont CEO Gary Goldberg and Freeport CEO Richard Adkerson have visited Indonesia in recent weeks in an attempt to negotiate a deal and restart copper exports in the country.
Read the full press release by Newmont Mining Corporation here: http://newmont.q4web.com/files/2014/Press Releases/Press Release 1 Juli 2014 - Arbitration Filed Over Export Restrictions i _v001_e210p1.pdf
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.