Hopes rise that Indonesian billionaire minister can break copper deadlock
Published on Jun 3, 2014 2:02 PM
JAKARTA/SYDNEY (REUTERS) - Indonesia's copper industry is pinning its hopes on one of the country's richest businessmen to help restart concentrate exports worth hundreds of millions of dollars, halted nearly five months ago over a controversial tax. With no obvious immediate political ambitions, billionaire Chairul Tanjung who was appointed in May as chief economics minister, is seen as more likely than his predecessor to reach a politically unpopular compromise with foreign miners, although he will still need the support of the president.
Adding to pressure for a deal, Newmont Mining Corp, one of two big foreign copper miners in Indonesia, said on Tuesday it has halted production of copper concentrate at its Batu Hijau mine after its stockpiling facility reached capacity. Newmont said it would await the outcome of government talks this week before deciding whether to stand down workers. Mr Chairul is also due this week to meet Freeport-McMoran Copper & Gold Inc chief executive Richard Adkerson.
Indonesia on Jan 12 introduced a ban on ore exports and levied an escalating tax on concentrate exports as part of efforts to force miners to build smelters and processing plants in Southeast Asia's largest economy. The new tax halted about US$500 million worth of monthly mineral ore and concentrate exports and led Freeport and Newmont, who account for 97 per cent of the country's copper output, to slash output as both say the rules conflict with their contracts.
Indonesian President Susilo Bambang Yudhoyono last month chose Mr Chairul to replace former chief economics minister Hatta Rajasa, who is running for vice president in July's presidential election. Mr Tanjung said he would review the mining export rules after they hampered first-quarter economic growth, which grew at its slowest in more than four years.
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