Indonesian ministry may recommend easing of Freeport tax this week

[CityFarmer]

Easing before the election?

Indonesian ministry may recommend easing of Freeport tax this week
03 Mar 2014 12:30
[JAKARTA] Indonesia's mines ministry could recommend as early as this week that Freeport-McMoRan Copper & Gold receive a reprieve from a controversial tax that has halted copper exports for more than two months, a government official told Reuters.

Freeport and fellow U.S. miner Newmont Mining Corp have refused to pay an export tax on mineral concentrates imposed in January, which rises from 25 per cent this year to up to 60 per cent by the second half of 2016, saying it breaches their contracts.

To win the tax reprieve, Freeport must pay the government a 5 per cent security bond for the construction of a smelter and finalise supply agreements with smelter-building companies, said Sukhyar, director general of coal and minerals for the mines ministry. "After (meeting those conditions) ... I will ask the ministry of finance to reduce, discount or even eliminate the export tax," he said after a book launching event over the weekend in Jakarta.

Freeport declined to comment. Finance ministry officials were not immediately available.
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Ref: Business Times Breaking News

[CityFarmer]

Freeport adding bargaining power with the new move, will it work?

Freeport Indonesia cuts output by 60%
11 Mar 2014 14:03
[JAKARTA] US mining giant Freeport-McMoRan Copper and Gold Inc has cut production at its Indonesian copper and gold mine by around 60 per cent, a union official told Reuters on Tuesday, two months after halting exports over a dispute with the government on a new export tax.

Freeport and fellow US miner Newmont Mining Corp have refused to pay an escalating export tax introduced on Jan 12 as part of package of new mining rules aimed at forcing miners to build smelters and process raw materials in Indonesia. "Although Freeport Indonesia has cut their production by around 60 per cent, Freeport management has not yet announced any layoffs so far," Papua-based Freeport union official Virgo Solossa said by telephone. "They are still waiting for a government decision on an export tax relaxation."

Freeport, who late last month said it may need to declare force majeure on copper concentrate sales at the world's fifth largest copper mine, could not be immediately reached for comment on Tuesday.- Reuters

Ref: Business Times Breaking News