Newmont Mining Reaches Agreement to Resume Copper Exports

Although the miner earlier declared force majeure at its Batu Hijau copper mine, Reuters reported that Newmont (NYSE:NEM) today signed a memorandum of understanding with the Indonesian government that will see the company resume copper concentrate exports next week. The government has significantly reduced its controversial export tax on concentrates from 25 percent to 7.5 percent for companies committed to building a smelter.

The deal is similar to one recently reached between Freeport McMoRan (NYSE:FCX) and Indonesia.

As quoted in the publication:

The signing of the Memorandum of Understanding comes a little more than a week after Newmont withdrew its international arbitration filing against the government.

The legal challenge severely tested the relationship between the two sides, with outgoing president Susilo Bambang Yudhoyono criticising the company’s methods.

Newmont agreed to pay a $25 million assurance bond for the building of an Indonesian smelter with fellow U.S. miner Freeport-McMoRan Inc. Newmont will also pay a 3.75 percent royalty on gold and 4 percent for copper, up from 1 percent and 3 percent previously.

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