Newmont Indonesia unit warns permit problem to hinhttps://www.reuters.com/article/marketsNews/idAFJAK52209320090723?rpc=44&sp=true
JAKARTA, July 23 (Reuters) - Newmont Mining Corp's (NEM.N)Indonesian unit said on Thursday it may slow mining activitylater this year and halt it completely in 2010 if it doesn'tobtain an essential land-use permit.
PT Newmont Nusa Tenggara (NNT), which operates the BatuHijau copper and gold mine in Sumbawa island in easternIndonesia, said the slowdown this year would not affect its2009 production target.
If it has to halt mining activity next year, it can stillcontinue to process stockpiled material. The firm has saidwithout the land-use permit, it would complete processing itsstockpile by 2017, rather than 2027 as previously forecast.
NNT has not been able to renew a permit from the forestryministry that would allow it to clear an area for wastedisposal. The request was submitted in 2004.
Kasan Mulyono, company spokesman, said NNT may graduallyreduce the use of heavy machinery such as hauling trucks to 70units by the end of this year, from 90 units currently if thegovernment does not grant the land-use permit, that wayreducing the amount of material excavated.
At peak production, the firm typically uses 111 units ofheavy equipment.
"We cannot expand our mining activity without the land usepermit so we may have to reduce the use of heavy machinery,"Mulyono told Reuters.
"But it won't affect the production target because it canstill be achieved with the available equipment," he said.
NNT said in February it expects to produce 455 millionpounds of copper concentrate this year, up from 284 millionpounds in 2008. The firm also expects to produce 486,000 ouncesof gold this year, up 80.6 percent from 269,000 ounces in 2008.
"If the permit is not granted until next year, the worstpossibility is mining activity may stop by the end of nextyear, but processing stockpile would continue for a few years,"Mulyono said, adding "We are optimist that the government willgrant the permit."
In 1997, Newmont was granted a forestry permit valid for 20years, a company spokesman said last year.
Two years later, the forestry ministry issued a law banningopen-pit mining in protected forest areas, but Newmont waslater granted another permit allowing it to extend its miningarea: that permit still has not been renewed, company officialssaid.
An arbitration court in late March ordered the foreignshareholders of NNT to sell part of their stake to localinvestors or to the government within six months, resolving along-running dispute over ownership of the mine.
Foreign owners of NNT are in the process of selling a stakein the firm to the local government.
Indonesia's government and PT NNT agreed last week to valueNNT's assets at $3.52 billion, paving the way for NNT's foreignowners to sell some of their shares in the company. Newmont hadearlier valued NNT's assets at $4.9 billion.[ID:nJAK542832](Reporting by Fitri Wulandari, editing by Sara Webb)