Indonesia's Newmont Nusa Tenggara was expected to reduce production at its Batu Hijau copper and gold mine around June 1, unless it is able to complete the process to secure an initial export permit from the government, the company said Wednesday.
NNT's copper concentrate storage facilities at Batu Hijau are set to hit full capacity in late May, triggering the need for an output cut, it added.
NNT had halted exports in January after the government levied an unexpected duty on its shipments, and the mines ministry said in April that the miner needed the approval of the trade ministry to resume exports.
"We will give export recommendation letters for five companies to the trade ministry next week. I think they can resume exports if they pay export duties," a mines ministry official told reporters in mid-April.
The miner is currently in discussions with the government over the export permit, after obtaining registered exporter status from the Ministry of Trade last month -- a requirement before receiving the export permit, the miner said in a statement.
Meanwhile, with the storages full, NNT will have to cease mining and milling operations while contracted services, purchasing and capital expenditure will be scaled back, the company said.
NNT will also have to place most of its employees on leave at reduced pay starting in early June.
Despite the lower output, Batu Hijau will continue to ship and sell copper concentrate to PT Smelting in Gresik, Indonesia, through the remainder of 2014, the company said. The smelter has limited capacity and is not able to buy sufficient quantities of NNT's copper concentrate to prevent the miner's output cut, it added.
PT Smelting has annual capacity of 300,000 mt of copper cathode and it produced 210,000 mt in 2013.
In 2013, NNT milled 35.16 million dry mt of ore from the Batu Hijau mine, down 0.6% from 2012, and produced 161 million lb of copper concentrate, up 2.5% year on year.
Newmont has a 48.5% effective economic interest in the company with remaining interests held by an affiliate of Japan's Sumitomo and various Indonesian entities. NNT is the operator of the Batu Hijau mine.
