Layoffs at Newmont to follow export ban

JAKARTA. Gold miner PT Newmont Nusa Tenggara (NNT) will have to lay off a majority of its workers if the government insists on imposing the ban on exports of raw ores on Jan. 12 .

The company, which currently employs over 4,000 workers, is expecting the government to issue a regulation to give them more time for preparations and to prevent the layoffs.

The ore-export ban, stipulated in the 2009 Mining Law, requires all miners in the country to export only processed ores in a bid to provide added value and eventually boost state revenues.

“If the government sticks to the schedule, we will reduce the number of our employees,” NNT community relations manager Syarafuddin Jarot said at a seminar on Thursday.

According to him, the company would not be able to process 99.99 percent of its products into intermediate goods as required by Energy and Mineral Resources Ministerial decree No. 20/2013, a derivative of the law. “NNT can process only 30 percent of its ore in its smelter in Gresik, East Java,” he said.

Syarafuddin said that NNT, which currently employs 4,100 people, would try its best to comply with the law, but also expected a solution in the form of transitional regulations at the same time.

“We expect that a solution, either in the form of a regulation in lieu of law [Perpu] or a presidential decree [Perpres], will be available soon as we have had discussions with both local and central governments,” he added.

“We hope we can still conduct our day-to-day business and export our products under these transitional regulations,” he said.

In preparation for complying with the 2009 Mining Law, NNT had recently signed agreements with PT Indosmelt (PTI) and PT Nusantara Smelting (PT NS) to supply copper concentrate, Syarafuddin said.

“Both companies will process the concentrate into high-purity copper at their smelters,” he added.

NNT’s hopes for transitional regulations received support from the local administration and residents of West Sumbawa district in West Nusa Tenggara, where the company operates.

West Sumbawa regent Zulkifli Muhadli said that he had sent a letter to the President asking for flexibility and for a three-year transition period for the mining company to comply with the law.

“We want to accommodate all parties’ interests,” he said, adding that he expected a Perpu would be issued.

Iwan Irawan, chairman of the local farmers’ association, said that imposing the law immediately would only harm workers.

NNT accounts for around 95 percent of West Sumbawa’s economy.

“It currently employs more than 3,000 local people and is a partner to more than 400 local businesses that employ 5,000 people,” he said, adding that those people would lose their current jobs if the government imposed the law next month.