Newmont's Indonesian operating arm has announced this afternoon that its copper concentrate storage facilities at Batu Hijau are now full, forcing the operation to cease production of copper concentrate. PT Newmont Nusa Tenggara, the mine operator, has been negotiating to find a way round the government's policy commitment to have more value added to mine products. In 2014, the mine produced 73,000 tonnes of copper in concentrate and 48,000 ozs of gold. The government will have to eventually give up on its demands or see the mine close at least until new smelting facilities can be constructed. Newmont maintains it would be uneconomic for it to construct a copper smelter itself. The pressure is mounting on the Indonesian government to offer more practical transition arrangements to allow enough time for smelting capacity to be built.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Indonesia is a tough sell for investors, they seem to make a real habit of staying in the headlines for the wrong reasons, especially when it comes to resources.