REPORT: Indonesia Lifts Export Ban for Two Miners
In the wake of Indonesia’s six-month ban on metal ore concentrates, the country has resumed exports for two miners after they agreed to pay a new 20 percent tax.
The two companies -- Sebuku Iron Lateritic Ores (SILO) and Lumbung Mineral Sentosa – gained permits from Indonesia to export iron ore, lead and zinc concentrates. It’s the first shipments of its kind since the country changed its export rules in January.
SILO is expected to export eight million tons of iron ore a year, while Lumbung should ship 29,000 tons a year. Both companies will be shipping to China.
The export tax, which was implemented to support domestic processing, aims to force mining companies to build smelters and processing facilities in Southeast Asia’s largest economy. At 20 percent this year, the tax rate skyrockets to 60 percent in the second half of 2016 for all metals but copper, which is 25 percent.
The big questions remains: when will US-based miners Newmont and Freeport McMoRan Copper & Gold agree to the tax? The two companies, which argue the new tax violates existing mining contracts, have veered in different courses. Freeport has already reached a preliminary agreement with the government while Newmont has filed for international arbitration earlier this month.
The ban on exports forced Newmont to declare force majeure on copper sales from Indonesia earlier this year, putting roughly 80 percent of its Batu Hijau mine employees on leave at reduced pay.
Disputes and confusion over the new mining rule have halted closely $500 million of monthly mineral ore and concentrate exports.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.