Newmont agrees tentative deal with Indonesia in export dispute

Reuters

* No MoU yet, deal needs approval from many government officials

* Newmont likely to resume copper concentrate exports this week

* May ship up to 50,000 T to Japan, Thailand and Spain -Sukhyar

By Wilda and Asmarini

JAKARTA, Sept 2 (Reuters) - Newmont Mining Corp has reached a tentative agreement with the Indonesian government on contract renegotiations, the CEO of the firm's local unit said, as both sides moved closer to ending an eight-month tax dispute that halted copper exports.

U.S.-based Newmont has been in a dispute with the Indonesian government over an export tax imposed in January that the firm said conflicted with its mining contract. It declared force majeure at its Batu Hijau copper mine on the remote Sumbawa island in June and filed for international arbitration in July.

But in a breakthrough to the increasingly acrimonious spat, Newmont withdrew its arbitration filing late last month and was expected to resume exports this week.

Discussions with Sukhyar, the director-general of coal and minerals at Indonesia's mining ministry, on the key issues being renegotiated have concluded, said Newmont's Indonesian Chief Executive Martiono Hadianto. "We have reached a deal," he said.

The six points agreed in the renegotiations included royalties, size of mining and exploration area, domestic processing and divestment obligations and possible mining contract extension. Newmont has already agreed to pay an export tax, government officials have previously said.

Although an agreement has been reached in principle, the deal still needs to be approved by several government officials, including Chief Economics Minister Chairul Tanjung, before a Memorandum of Understanding (MoU) is signed by both parties.

Newmont is likely to resume exports this week by shipping up to 50,000 tonnes of copper concentrate to Japan, Thailand and Spain, Sukhyar said.

Before Indonesia's new export rules kicked in, Newmont had forecast total copper concentrate output from its Indonesian mine at 110,000 tonnes to 125,000 tonnes this year.

"I'll pray and hope we can sign an MoU tomorrow," Hadianto said.

(Writing by Michael Taylor; Editing by Himani Sarkar)

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