NEWMONT MINING CORP /DE/
FORM 8-K (Current report filing)
Filed 09/04/14 for the Period Ending 09/03/14 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year
6363 SOUTH FIDDLERS GREEN CIRCLE GREENWOOD VILLAGE, CO 80111 303-863-7414 0001164727 NEM 1040 - Gold And Silver Ores Gold & Silver Basic Materials 12/31
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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 3, 2014
Newmont Mining Corporation (Exact name of registrant as specified in its charter)
Delaware
001-31240
84-1611629
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
6363 South Fiddlers Green Circle, Greenwood Village, CO 80111 (Address of principal executive offices) (zip code)
(303) 863-7414 (Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Not Applicable (Former Name or Former Address, if Changed Since Last Report)
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On August 26, 2014, PT Newmont Nusa Tenggara (“PTNNT”), a subsidiary of Newmont Mining Corporation (“Newmont”) operating the Batu Hijau mine in Indonesia, issued a news release reporting that PTNNT and Nusa Tenggara Partnership B.V. (“NTPBV”), PTNNT’s majority shareholder and a Newmont subsidiary, requested dismissal of the arbitration filed with the International Centre for Settlement of Investment Disputes relating to the export restrictions that halted production at the Batu Hijau mine. The decision to withdraw the arbitration was made after commitments from senior Government of Indonesia officials to open formal negotiations to conclude a Memorandum of Understanding (“MoU”) with PTNNT upon dismissal of the arbitration. Subsequently, on September 3, 2014, PTNNT entered into a MoU with the Government of Indonesia’s Ministry of Energy and Mineral Resources (referred to herein as the “Government”) under which the Government and PTNNT have agreed to certain increases in Government revenues and to negotiate certain amendments to the Contract of Work (“CoW”). PTNNT expects imminently to receive a permit to export copper concentrate, which will allow PTNNT to recall employees and contractors to work and begin ramping up operations at the Batu Hijau copper and gold mine in a safe and timely manner. PTNNT currently expects to begin exporting stockpiled copper concentrate and to resume normal operations during September 2014. Effective with the signing of the MoU, PTNNT has agreed to pay export duties at the rates set forth in a new regulation issued in July 2014; to provide a $25 million surety bond to demonstrate its support for smelter development; to increase royalties to 4.0% for copper, 3.75% for gold, and 3.25% for silver; and to increase annual deadrent to US$2 per hectare. On July 25, 2014, the Government’s Ministry of Finance revised its January 2014 regulations to reduce export duty rates on copper concentrate for companies demonstrating support for the smelter development process. The revised regulations provide for export duties to reduce as smelter development progresses. The export duties are set at 7.5% while smelter development progress is in the 0% - 7.5% range, declining to 5% when development progress exceeds 7.5% and 0% when development progress exceeds 30%. The MoU also outlines terms for the six main elements of the CoW renegotiation, which will be incorporated into an amendment of the CoW. The six areas are: concession area size; royalties, taxes and export duties; domestic processing and refining; ownership divestment; utilization of local manpower, domestic goods and services; and duration of the CoW. PTNNT and the Government will commence negotiations for an amended CoW that are expected to be completed within six months. No terms of the CoW other than the duties, smelter bond, royalties and deadrent described above will be changed until completion of the CoW renegotiation. The foregoing summary of the MoU does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the MoU, which is filed as Exhibit 10.1 hereto and incorporated herein by reference. A copy of the press release announcing that PTNNT entered into a MoU with the Government is attached hereto as Exhibit 99.1 and is incorporated herein by reference. 2
The disclosure herein includes forward-looking statements and actual outcomes may differ materially from those anticipated by the forwardlooking statements. Please refer to the cautionary statement in the press release attached hereto as Exhibit 99.1, and to the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2013, and Newmont’s subsequent filings with the Securities and Exchange Commission. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d)
Exhibits.
The Exhibits included as part of this Current Report are listed in the attached Exhibit Index. 3
SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. By: /s/ Stephen P. Gottesfeld Name: Stephen P Gottesfeld Title: Executive Vice President, General Counsel and Corporate Secretary Dated: September 4, 2014 4
EXHIBIT INDEX Exhibit Number
Description of Exhibit
10.1
Memorandum of Understanding dated as of September 3, 2014, between the Directorate General of Mineral and Coal, the Ministry of Energy and Mineral Resources and PTNNT on Adjustment of the Contract of Work
99.1
News Release, PTNNT to Resume Operations and Copper Concentrate Exports, dated September 4, 2014 5
Exhibit 10.1 NOTA KESEPAHAMAN
MEMORANDUM OF UNDERSTANDING
ANTARA
BETWEEN
DIREKTORAT JENDERAL MINERAL
DIRECTORATE GENERAL OF MINERAL AND COAL
DAN BATUBARA
THE MINISTRY OF ENERGY
KEMENTERIAN ENERGI
AND MINERAL RESOURCES
DAN SUMBER DAYA MINERAL
AND
DAN
PT NEWMONT NUSA TENGGARA
PT NEWMONT NUSA TENGGARA
ON
TENTANG
ADJUSTMENT OF
PENYESUAIAN KONTRAK KARYA
THE CONTRACT OF WORK
Nota Kesepahaman ini dibuat dan ditandatangani pada tanggal 3 September 2014 oleh dan antara:
This Memorandum of Understanding is made and undersigned on 3 September 2014 by and between:
1.
Pemerintah Republik Indonesia dalam hal ini diwakili Direktur Jenderal Mineral dan Batubara, Kementerian Energi dan Sumber Daya Mineral (selanjutnya disebut “Pemerintah”); dan
1.
The Government of the Republic of Indonesia which in this matter is represented by the Director General of Mineral and Coal, Ministry of Energy and Mineral Resources (hereinafter referred to as the “Government”); and
2.
PT Newmont Nusa Tenggara, suatu perseroan terbatas yang didirikan secara sah berdasarkan hukum negara Republik Indonesia, beralamat di Menara Rajawali Lt.26 Jl. DR. Ide Anak Agung Gde Agung Lot #5.1 Kawasan Mega Kuningan, Jakarta, 12950, Republik Indonesia, yang diwakili oleh Presiden Direkturnya (selanjutnya disebut “Perusahaan”).
2.
PT Newmont Nusa Tenggara, a limited liability company duly established under the laws of the Republic of Indonesia, having its address at Menara Rajawali Lt.26 Jl. DR. Ide Anak Agung Gde Agung Lot #5.1 Kawasan Mega Kuningan, Jakarta, 12950, Republik Indonesia, represented by its President Director (hereinafter referred to as the “Company”).
Page 1 of 10
(Pemerintah dan Perusahaan bersama-sama selanjutnya disebut “Para Pihak”).
(The Government and the Company together to be further referred to as the “Parties”).
BAHWA, berdasarkan Pasal 169 (a) dan (b) Undang-Undang Nomor 4 Tahun 2009 tentang Pertambangan Mineral dan Batubara (UU Nomor 4 Tahun 2009), Kontrak Karya masih tetap berlaku sampai dengan masa berakhirnya Kontrak Karya tersebut, dan beberapa ketentuan didalam Kontrak Karya tersebut akan disesuaikan.
WHEREAS, Article 169 (a) and (b) of Law Number 4 Year 2009 on Mineral and Coal Mining (Law No. 4 Year 2009) states that the Contract of Work remains valid until the expiration of its term, and that certain points of the provisions under the Contract of Work be adjusted.
BAHWA, Para Pihak membuat dan menandatangani Kontrak Karya pada tanggal 2 Desember 1986 dimana Perusahaan melakukan kegiatan Pertambangan yang berlokasi di Provinsi Nusa Tenggara Barat (“KK”).
WHEREAS, the Parties made and entered into a Contract of Work on 2 December 1986 pursuant to which the Company conducts mining activities located in Nusa Tenggara Barat Province (hereinafter referred to as the “COW”).
OLEH KARENANYA Para Pihak menyepakati ke-empat hal sebagai berikut:
NOW THEREFORE, the Parties agree to the following four points:
1.
Para Pihak akan menegosiasikan sebuah KK Perubahan yang memuat perubahan-perubahan aturan mengenai Wilayah KK, Penerimaan Negara, Pengolahan dan Pemurnian Dalam Negeri, Divestasi, dan Penggunaan Tenaga Kerja Lokal serta Barang dan Jasa Dalam Negeri, yang merefleksikan hasil-hasil perundingan yang diuraikan di bawah ini.
1.
Page 2 of 10
The Parties will negotiate an amended COW, to address the provisions of: COW Area, State Revenue, Domestic Processing and Refining, Divestment, and Utilization of Local Manpower, Domestic Goods, and Services reflecting the results of discussion set out below.
2.
Perusahaan akan mengikuti aturan dalam Peraturan Menteri Keuangan No. 153/PMK.011/2014 tanggal 25 Juli 2014 tentang Perubahan Ketiga atas Peraturan Menteri Keuangan Nomor 75/PMK.011/2012 tentang Penetapan Barang Ekspor Yang Dikenakan Bea Keluar dan Tarif Bea Keluar dengan mengacu kepada perkembangan pembangunan fasilitas pemurnian PT Freeport Indonesia.
2.
The Company will comply with the Minister of Finance Regulation No. 153/PMK.011/2014 dated 25 July 2014 Concerning Third Amendment of the Minister of Finance Regulation Number 75/PMK.011/2012 Concerning Determination of Export of Goods That Are Subject to Export Duties and Export Duty Tariffs and with reference to the progress of the PT Freeport Indonesia refining facility development.
3.
Perusahaan akan membayar Jaminan Kesungguhan pembangunan smelter sebesar US$25,000,000 (dua puluh lima juta dollar Amerika Serikat) sebagaimana dijelaskan di bawah ini.
3.
The Company will deposit a Smelter Surety Bond of US$25,000,000 (twenty five million United States Dollars) as discussed below.
4.
Perusahaan akan membayar royalti sebagaimana dimaksudkan dalam poin Penerimaan Negara, nomor 3(B), di bawah ini.
4.
The Company will pay royalties as referred to in point State Revenue No. 3(B) below.
DAN SELANJUTNYA OLEH KARENANYA, akan menuangkan hasil pembahasan untuk amandemen KK dalam Nota Kesepahaman ini sebagai berikut:
AND FURTHER THEREFORE to put in writing the results of the discussion for amending the COW into a Memorandum of Understanding as follows:
1.
1.
WILAYAH KK
Berdasarkan aspek teknis dalam Evaluasi dan Rencana Kerja Jangka Panjang, Pemerintah berpandangan bahwa wilayah KK yang dapat dipertahankan oleh Perusahaan seluas 66.422 hektar dengan peta dan koordinat sebagaimana terlampir dan akan diberikan suatu wilayah proyek ( project area ). Wilayah proyek ( project area ) yang dimohon akan diberikan apabila Perusahaan berencana mengembangkan tambang di blok Elang.
COW AREA
On the basis of technical aspects in the Evaluation and Long-Term Work Plan, the Government is of the view that the COW Area that can be maintained by the Company encompasses 66,422 hectares with the map and coordinates as attached and will be granted a project area. The requested project area will be granted if the Company intends to develop a mine in Elang block.
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2.
3.
KELANJUTAN OPERASI PERTAMBANGAN
2.
MINING BUSINESS CONTINUATION
Jangka waktu Operasi Produksi Perusahaan berdasarkan KK adalah 30 (tiga puluh) tahun terhitung dari tahun 2000 dan tetap berlaku sampai dengan tahun 2030.
The Production Operation period based on the COW is 30 (thirty) years commencing in the year 2000 and shall continue in effect until the year 2030.
Para Pihak memahami bahwa kelanjutan operasi pertambangan/ pemrosesan setelah tahun 2030 akan dibicarakan pada waktu yang ditentukan bersama sesuai dengan peraturan yang berlaku. Apabila Perusahaan bermaksud melakukan investasi baru, maka Perusahaan dapat mengajukan jangka waktu Operasi Produksi dengan bentuk dan proses kelanjutan operasi pertambangan sesuai dengan ketentuan peraturan perundang-undangan.
The Parties understand that the continuation of the mining/ processing operations after the year 2030 will be discussed at a mutually agreed time according to prevailing regulations. If the Company intends to make a new investment, the Company may apply for the continuation of the Production Operation period, in form and process consistent with the laws and regulations.
PENERIMAAN NEGARA
3.
Dalam hal Penerimaan Negara, Para Pihak sepakat bahwa hal-hal berikut akan menjadi pertimbangan dalam negosiasi KK Perubahan: Page 4 of 10
STATE REVENUE With regard to the State Revenue, the Parties agree that the following items will be taken into account in the negotiations of the Amended COW:
A. Tarif PPh Badan dan tata cara perhitungannya ditetapkan nailed down sesuai dengan ketentuan KK;
A. Rate of the Corporate Income Tax and its calculation method is determined nailed down in accordance with the COW;
B.
Royalti , Sejak penandatanganan Nota Kesepahaman, Perusahaan bersedia meningkatkan tarif Royalti atas tembaga, emas dan perak dari tarif-tarif sebagaimana diatur dalam Pasal 13 ayat 2 KK menjadi 4% untuk tembaga, 3.75% untuk emas, 3.25% untuk perak dan atas Mineral ikutan apabila perusahaan menerima manfaat/pendapatan sesuai dengan tarif yang diatur dalam Peraturan Pemerintah Nomor 9 Tahun 2012 dan perubahan-perubahannya, dan akan berlaku sampai berakhirnya KK.
B.
C.
Iuran Tetap ( Deadrent ) , akan mengikuti ketentuan yang tercantum dalam Peraturan Pemerintah Nomor 9 Tahun 2012 dan perubahan-perubahannya, dan akan berlaku sampai berakhirnya KK.
C. Iuran Tetap (Deadrent), will follow the provisions set forth under the Government Regulation Number 9 Year 2012 and its amendments, and will be effective until the end of the COW.
D.
Pajak-pajak sebagaimana di bawah dan retribusi, sesuai dengan undang-undang dan peraturan yang berlaku, terdiri dari:
D. The following taxes and duties, in accordance with prevailing law and regulations, consisting of:
1.
Pemotongan atas PPh karyawan;
Royalty, Upon signing the MOU, the Company is willing to increase the Royalty rates for copper, gold, and silver from the rates set forth in Article 13 paragraph 2 of the COW to become 4% for copper, 3.75% for gold, and 3.25% for silver and for associated minerals for which the company receives any benefits/revenue in accordance to the rates specified in the Government Regulation Number 9 Year 2012 and its amendments, until the end of the COW.
1. Page 5 of 10
Withholding Personal income tax;
E.
2.
Pemotongan dari PPh atas bunga, dividen, sewa, jasa teknik, jasa manajemen, dan jasa lainnya;
2.
Withholding taxes on interest, dividends, rental, technical service, management service and other services;
3.
Pajak Pertambahan Nilai;
3.
Value Added Tax;
4.
Bea Materai;
4.
Stamp duty;
5.
Bea Masuk;
5.
Import duty;
6.
Pajak Bumi dan Bangunan;
6.
Land and Building Tax;
7.
Pemenuhan kewajiban pajak.
7.
Tax compliance.
Devisa Hasil Ekspor wajib diterima melalui bank di Indonesia yang dilaksanakan sesuai dengan Peraturan Bank Indonesia No. 16/10/PBI/2014 tentang Perubahan terkini atas Peraturan Bank Indonesia No. 13/20/PBI/2011 tentang Penerimaan Devisa Hasil Ekspor dan Penarikan Pinjaman Luar Negeri.
Penerimaan Negara terkait dengan Royalti dan Iuran Tetap, sebagaimana yang telah disepakati di atas, berlaku efektif sejak Nota Kesepahaman ini ditandatangani
E.
Proceeds from Sales shall be received through an Indonesian Bank and will be conducted according to the regulation of Bank Indonesia No. 16/10/PBI/2014 on the Latest Revision of Bank of Indonesia Regulation No. 13/20/PBI/2011 on Proceeds from Sales and Withdrawal of Foreign Loan.
State revenue in regard to royalty and dead rent, as have been agreed to above, will enter into force upon signing of the Memorandum of Understanding.
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4.
PENGOLAHAN DAN PEMURNIAN DALAM NEGERI
4.
DOMESTIC PROCESSING AND REFINING
Perusahaan mendukung dan melaksanakan kebijakan Pemerintah dan aturan-aturan dalam Undang-Undang Nomor 4 Tahun 2009 serta peraturan mengenai pengolahan dan pemurnian hasil penambangan di dalam negeri.
The Company supports and will implement the Government’s policy and provisions under Law No. 4 Year 2009 and regulations on domestic processing and refining of mining products.
Dalam rangka melaksanakan Undang-Undang tersebut di atas, Perusahaan sepakat untuk menjual konsentratnya kepada perusahaan-perusahaan lain yang bermaksud untuk membangun suatu fasilitas pemurnian di dalam negeri, termasuk PT Freeport Indonesia. Perusahaan telah menandatangani nota kesepahaman dengan PT Freeport Indonesia sebagaimana terlampir.
To implement the above Law, the Company agrees to supply its concentrate to other companies who intend to construct a domestic refining facility, including PT Freeport Indonesia. The Company has entered into a memorandum of understanding with PT Freeport Indonesia as attached.
Dalam rangka untuk melanjutkan ekspor dan menghindari dampak yang sangat merugikan pada operasi, tenaga kerja dan masyarakat setempat dan pemangku kepentingan lainnya, Perusahaan akan membayar Bea Keluar dan Jaminan Kesungguhan untuk mendukung fasilitas pemurnian PT Freeport Indonesia.
In the course of resuming exports and avoiding highly detrimental impacts to the operation, workforce and local community as well as other stakeholders, the Company will pay an Export Duty and a Smelter Surety Bond to support the development of the refining facility by PT Freeport Indonesia.
Perusahaan akan menempatkan Jaminan Kesungguhan sebesar US$25,000,000 (dua puluh lima juta dollar Amerika Serikat). Jaminan Kesungguhan tersebut dapat dicairkan seiring dengan kemajuan pembangunan fasilitas pemurnian PT Freeport Indonesia sesuai dengan ketentuan peraturan perundang-undangan.
The Company will place a Smelter Surety Bond in the amount of US$25,000,000 (twenty five million United States Dollars). The Smelter Surety Bond will be disbursed in pace with the progress of the PT Freeport Indonesia refining facility development in accordance with the provisions of the Law and regulations.
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5.
Bea Keluar yang harus dibayar oleh Perusahaan akan didasarkan pada besaran yang diatur dalam Peraturan Menteri Keuangan No. 153/PMK.011/2014 tanggal 25 Juli 2014 Tentang Perubahan Ketiga atas Peraturan Menteri Keuangan Nomor 75/PMK.011/2012 tentang Penetapan Barang Ekspor Yang Dikenakan Bea Keluar dan Tarif Bea Keluar dengan mengacu kepada perkembangan pembangunan fasilitas pemurnian PT Freeport Indonesia.
The export duty to be paid by the Company will follow the rates as stipulated by the Minister of Finance Regulation No. 153/PMK.011/2014 dated 25 July 2014 Concerning Third Amendment of the Minister of Finance Regulation Number 75/PMK.011/2012 Concerning Determination of Export of Goods That Are Subject to Export Duties and Export Duty Tariffs and with reference to the progress of the PT Freeport Indonesia refining facility development.
Sesudah ditandatanganinya Nota Kesepahaman ini, Pemerintah akan memberikan seluruh rekomendasi dan ijin yang diperlukan agar dapat menyetujui dan memperbolehkan Perusahaan mengekspor dan menjual konsentrat tembaga.
Upon execution of this Memorandum of Understanding, the Government will grant all recommendations and permits needed to approve and allow the Company to export and sell copper concentrates.
DIVESTASI Para Pihak sepakat bahwa Perusahaan telah melaksanakan kewajiban divestasi sebesar 51% sesuai dengan ketentuan didalam KK PT NNT.
5.
Apabila terjadi jumlah peningkatan modal Perusahaan, Perusahaan harus mendapatkan persetujuan Pemerintah sesuai dengan ketentuan peraturan perundang-undangan. Page 8 of 10
DIVESTMENT The Parties agree that the Company has performed the divestiture obligation of 51% in accordance with the provisions of PT NNT’s COW. If there is an increase in the Company’s equity capital, the Company must obtain approval from the Government as required by the prevailing laws and regulations.
6.
PENGGUNAAN TENAGA KERJA LOKAL SERTA BARANG DAN JASA DALAM NEGERI
6.
Perusahaan berkomitmen untuk mengutamakan pemanfaatan tenaga kerja lokal dan barang dalam negeri, serta menggunakan perusahaan jasa pertambangan lokal dan/atau nasional yang terdaftar.
USE OF LOCAL MANPOWER, AND DOMESTIC GOODS AND SERVICES The Company is committed to prioritize utilization of local manpower, domestic goods as well as use of the registered local and/or national mining service companies.
Kesepakatan untuk membayar bea keluar, Jaminan Kesungguhan pembangunan smelter, royalty, dan iuran tetap akan berlaku sejak penanda-tanganan Nota Kesepahaman ini dan persetujuan Pemerintah untuk melakukan ekspor. Tidak ada ketentuan lain di dalam KK akan diubah sampai diselesaikannya Amandemen KK dimana Para Pihak sepakat untuk menyelesaikannya dalam waktu 6 (enam) bulan sejak penanda-tanganan Nota Kesepahaman ini.
The agreement to pay export duties, the Smelter Surety Bond, royalties, and dead rent described above will take effect upon signing of this Memorandum of Understanding and Government approval to export. No other provisions of the COW will be changed until the finalization of an Amended COW which the Parties agree to be completed within 6 (six) months of signing the Memorandum of Understanding.
Para Pihak mengakui bahwa Nota Kesepahaman ini tidak menghilangkan hak dan kewajiban Para Pihak sebagaimana tercantum dalam KK.
The Parties recognize that this Memorandum of Understanding does not waive the rights and obligation of both Parties as set forth in the COW.
Dalam hal terdapat perbedaan pendapat yang terkait Nota Kesepamahan ini, maka Para Pihak sepakat untuk menyelesaikan perbedaan pendapat tersebut secara musyawarah untuk mencapai mufakat.
In the event of differences of opinions related to this Memorandum Of Understanding, the Parties agree to resolve such differences of opinion by way of deliberation to reach a consensus.
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Nota Kesepahaman ini dibuat dalam Bahasa Indonesia dan Bahasa Inggris.
This Memorandum of Understanding is drawn up in Bahasa Indonesia and English.
DEMIKIANLAH, Nota Kesepahaman ini ditandatangani dan dibuat dalam 2 (dua) rangkap asli untuk masing-masing pihak.
IN WITNESS WHEREOF, this Memorandum of Understanding is signed and made in 2 (two) duplicates; each document an original for each party.
Atas nama Pemerintah/On behalf of the Government Direktur Jenderal Mineral dan Batubara/Director General of Mineral and Coal Kementerian Energi dan Sumberdaya Mineral Republik Indonesia/Ministry of Energy and Mineral Resources
Atas nama Perusahaan/On behalf of the Company Presiden Direktur/President Director
/s/ R. Sukhyar (R. Sukhyar)
/s/ Martiono Hadianto (Martiono Hadianto)
PT Newmont Nusa Tenggara
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Exhibit 99.1
PTNNT to Resume Operations and Copper Concentrate Exports Jakarta, September 4, 2014 – PT Newmont Nusa Tenggara (PTNNT) and the Government of Indonesia signed a Memorandum of Understanding (MoU) that will result in the company receiving a permit to export copper concentrate. Once the export permit is received, PTNNT will recall employees and contractors to work and begin ramping up operations at the Batu Hijau copper and gold mine in a safe and timely manner. The company expects Batu Hijau to begin exporting copper concentrate and to resume normal operations during September. The MoU, signed by R. Sukhyar, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, and Martiono Hadianto, PTNNT’s President Director, will lead to mutually agreed upon modifications to PTNNT’s Contract of Work (CoW). “Our agreement demonstrates PTNNT’s commitment to supporting the Government’s strategy to increase domestic processing, and to restarting operations for the benefit of the people of Indonesia,” said Martiono Hadianto, President Director of PTNNT. “All parties recognize that resuming copper concentrate exports from Batu Hijau is vital to protecting the livelihoods of the thousands of employees and contractors who work at the mine, while also restoring the economy of the region.” The MoU outlines a mutual understanding on the six key elements of the Contract of Work (CoW) renegotiation, which will be incorporated into an amendment of the CoW. The six areas are: concession area size; royalties, taxes and export duties; domestic processing and refining; ownership divestment; utilization of local manpower, domestic goods and services; and duration of the CoW. Effective with the signing of the MoU, PTNNT agreed to pay export duties set forth in a new regulation issued in July 2014, provide a $25 million assurance bond to demonstrate its support for smelter development, pay royalties of 4 percent for copper, 3.75 percent for gold, and 3.25 percent for silver, and pay deadrent of US$2 per hectare. On July 25, 2014, the Ministry of Finance revised its January 2014 regulations to reduce export duties on copper concentrate for companies demonstrating support for the smelter development process. The revised regulations provide for export duties on copper concentrate to reduce as development progresses, with duties initially at 7.5 percent, then declining to 5 percent when development progress exceeds 7.5 percent and finally to 0 percent when smelter progress exceeds 30 percent. PTNNT and the Government will commence negotiations to amend the CoW, with completion anticipated within six months. No terms of the CoW other than the duties, smelter bond, royalties, and deadrent described above will be changed until completion of the CoW renegotiation.
About PTNNT’s Contract of Work and Copper Concentrate Production The Batu Hijau copper and gold mine was developed under an investment agreement called the Contract of Work (CoW). These Contracts of Work were designed to provide assurance and stability to encourage significant, long-term investments, which is why they were endorsed by Parliament and approved by the President of Indonesia. PTNNT has a Memorandum of Understanding to participate in a process with PT Freeport Indonesia designed to lead towards the development of a smelter. The Company also has negotiated and signed conditional concentrate supply agreements with two Indonesian companies that publicly announced plans to build their own copper smelters in the country. The value added through Batu Hijau’s processing plant improves the quality of the copper ore mined by more than 50 times, capturing roughly 95 percent of the entire value stream in Indonesia. PTNNT also has supported in-country smelting for many years by shipping as much copper concentrate to PT Smelting Gresik – Indonesia’s only copper smelter – as it can take from Batu Hijau. About PTNNT PTNNT is a copper and gold mining company operating under a 4th Generation Contract of Work entered into on 2 December 1986. PTNNT is 56% owned by Nusa Tenggara Partnership B.V. (which is owned by Newmont Mining Corporation and Nusa Tenggara Mining Corporation of Japan), with 7% of NTPBV’s stake possibly to be divested to the Government of Indonesia through purchase by an agency of the Ministry of Finance. PT Pukuafu Indah owns 17.8% of PTNNT, PT Multi Daerah Bersaing owns 24% (which in turn is owned by PT Multi Capital and PT Daerah Maju Bersaing, a joint company owned by the province of Nusa Tenggara Barat, and the kabupatens of Sumbawa Barat and Sumbawa) and PT Indonesia Masbaga Investama owns 2.2%. Since commencing operations in 2000, PTNNT has contributed nearly IDR 90 trillion in taxes, fees, royalties, wages, purchases of domestic goods and services, and dividends paid to the national shareholders. In addition, PTNNT also has implemented corporate social responsibility programs to improve the quality of life and the prosperity of communities around the mine by providing funds in the amount of IDR 50 billion per year, on average. PTNNT employs approximately 4,000 employees and 4,000 contractors. ***** Media Contact: Rubi W. Purnomo Email
: :
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Cautionary Statement This news release contains “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, that are intended to be covered by the safe harbor created by such sections and other applicable laws and regulations. Such forward-looking statements may include, without limitation, statements regarding PTNNT’s and/or Newmont Mining Corporation’s (Newmont) expectations relating to the outcome of future negotiations and discussions with government officials and entities (including, without limitation, with respect to modifications to the Contract of Work), expectations regarding receipt of export permits and approvals, expectations regarding ramp-up, future concentrate shipments and in-country smelter availability, and statements regarding future operations, production, sales and costs. Where PTNNT and/or Newmont expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors. For a discussion of risks, see the Risk Factors section in Newmont’s 2013 Annual Report on Form 10-K, including, without limitation, under the headings “Our operations are subject to risks of doing business,” “Our Batu Hijau operation in Indonesia is subject to political and economic risks,” and “The Contract of Work has been and may continue to be the subject of dispute, legal review, or requests for renegotiation by the Indonesian government, and is subject to termination by the Indonesian government if we do not comply with our obligations, which would result in the loss of all or much of the value of Batu Hijau,” which is on file with the U.S. Securities and Exchange Commission (SEC) at www .sec.gov , as well as Newmont’s other recent SEC filings. PTNNT and Newmont do not undertake any obligation to publicly issue revisions to any “forward-looking statement,” to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
