Freeport, Newmont Agree to Pay Smelter Guarantee
5 May 2014 10:26 WIB
TEMPO.CO, Jakarta – The Indonesian units of US miners Freeport-McMoRan Copper & Gold Inc (FCX) and Newmont Mining Corp (NEM) have agreed to pay financial guarantee to build smelters. The cash guarantee, which amounts to approximately US$125 million, will be placed in a state-owned bank.
"Freeport Indonesia has offered US$100 million, while Newmont Nusa Tenggara offered US$25 million," said Dede Ida Suhendra, director of mineral business development at the Ministry of Energy and Mineral Resources' directorate general of mineral and coal.
A team of experts, said Dede, will evaluate the amount of the guarantee to make sure that it is in accordance with the companies' obligations.
The government requires that all mining license (IUP) holders to pay a financial guarantee to prove they are serious about building domestic metal-processing plants. For new smelter constructions, companies must pay five percent of the total investment. For smelter constructions that are already underway, the payment is five percent of the remaining value of unrealized investment
Freeport Indonesia's spokesperson Daisy Primayanti confirmed that the company has agreed to pay the US$100-million financial guarantee.
BERNADETTE CHRISTINA MUNTHE
