Newmont Mining Corp.’s Indonesian contract to extract copper in Southeast Asia’s largest economy won’t automatically be revoked after a Feb. 22 deadline to sell a stake expires, and a final decision will go to the Cabinet.
“The contract termination will come from myself, as the energy and mining minister,” Purnomo Yusgiantoro told reporters Wednesday in Jakarta.
“However, I will only terminate it after getting an approval from the Cabinet meeting,” he said, without stating when the president and ministers are due to meet.
Indonesia sent a so-called default notice to the Denver- based mining company’s local unit Feb. 11, saying rights to the Batu Hijau mine may be canceled unless a 10 percent stake is sold to local investors by Friday. Simon Sembiring, the director general of coal and minerals, said Feb. 14 that “we will cancel the contract” unless the sale is agreed to by Friday.
A cancellation of the rights to Indonesia’s second-largest copper mine may erode overseas investors’ confidence in the metals-rich nation, which also has reserves of gold, nickel and tin.
Newmont holds 45 percent of Batu Hijau and operates the mine, while Japanese investors including Sumitomo Corp. have 35 percent.
Indonesian businessmen hold the balance.
