Freeport, Newmont said to agree in principle to Indonesia export tax


Foreign copper miners in Indonesia have agreed in principle to pay an export tax, the country's deputy finance minister says, following talks aimed at restarting concentrate exports after a five-month halt.

Freeport-McMoRan (FCX +1.5%) and Newmont Mining (NEM +0.4%), which together account for 97% of Indonesia's copper output, had argued they should be exempt from the tax as introduced in January, which kicks in at 25% and rises to 60% in 2016 before a total concentrate export ban in 2017.

FCX CFO Kathleen Quirk tells an investor conference in Chicago today that the company expects to resume exports very soon and the export tax would be "significantly reduced."

Copper for July delivery, the most actively traded contract, suffers its biggest one-day drop since April as a resolution nears; also there are concerns that a probe of metals warehousing at a Chinese port could hurt demand if China clamps down on copper-based financing.

ETFs; JJC, CPER, CUPM

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Comments (6)
  • minwyhe
    , contributor
    Comments (115) | Send Message
     
    Finally, these 2 have taken action to resolve this issue and hopefully help the workers in Indonesia and maybe the economy there. Hopefully they will honor their agreement and start shipping copper again.
    4 Jun 2014, 03:58 PM Reply Like
  • BSmith8592
    , contributor
    Comments (42) | Send Message
     
    It is my opinion that Freeport to pay next to nothing in export taxes if they are forced into helping to build a refinery. Indonesia had no right to invalidate the COW that was already in place. They should reduce what they are mining to what the existing refinery will handle and redeploy the projected improvements into upgrading well profitability where unstable governments cannot rip them off.
    4 Jun 2014, 04:22 PM Reply Like
  • james.
    , contributor
    Comments (1377) | Send Message
     
    Well said Smith , and that goes double for NEM !! The good news in the above breaking news item, is that Indonesia agreed to a "significant reduction" in their "Export Tax" ! Hip-hip-horray ! Now Chase Bank can issue a powerful Buy Recommendation on NEM, as Chase Bank stated in early 2014 that was the only negative on NEM preventing a Buy Recommendation from the powerhouse Chase Bank ! Look for NEM to rise substantially now , especially if GLD can close this week at or above $123 as I surmise it will. Then next week, when Gazprom announces no agreement can be reached with Ukraine on Natural Gas deliveries to the bankrupt Ukraine, this will place President Putin and the Pro-Russian Separatists in the driver's seat, which will then cause GLD to Gap above to $124, thereby creating an island Bottom Reversal to propel GLD to the next nearby top at $152. Gold is now rising up on its 3rd Leg Super Cycle taking it classically to new all-time highs of $2700 per oz circa July 2015, with more upside to come soon thereafter. Have a great day Smith ! June 4, 2104 at 1:46 pm PDT.
    4 Jun 2014, 04:47 PM Reply Like
  • very_frustrated
    , contributor
    Comments (3) | Send Message
     
    Hope you're right James. This down leg in gold has been very very painful. I guess that's what markets do - they kill the spirits of holders and then the trend changes.
    5 Jun 2014, 08:46 AM Reply Like
  • Arnel
    , contributor
    Comments (30) | Send Message
     
    When you live and work in SE Asia one of the first things you learn is that they think a contract only defines what the foreigner is supposed to do but optional for locals. The thin veneer of a legal system and the corruption create an environment where the payout better be huge if you want to play. I have been to the Grasberg mine twice for different projects and it is an amazing place. The flexibility needed by management to keep it running smoothly is to be admired, but make no mistake about who is really in charge.
    5 Jun 2014, 06:48 PM Reply Like
  • bobewaldjr
    , contributor
    Comments (2) | Send Message
     
    With China being so agressive in the area I wonder if they are applying pressure on the Indonesian Government so as to be in a position to take control of the mines and processing facilities of FCX and NEM. Just a thought.
    8 Jun 2014, 08:48 PM Reply Like
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