The Jakarta Globe RSS: Business http://www.thejakartaglobe.com 2013 The Jakarta Globe Your City, Your World Thu, 24 Jul 2014 16:46:25 +0000 en-US hourly 1 http://www.thejakartaglobe.com/images/jakarta-globe.gif http://www.thejakartaglobe.com Astra Intl First-Half Profit Rises 11%, as Auto Unit's Decline Weighs on Overall Performance http://www.thejakartaglobe.com/?p=309849 Thu, 24 Jul 2014 18:16:19 +0700 Jakarta. Astra International, a Jakarta-based diversified conglomerate, reported net income rose 11 percent to Rp 9.8 trillion ($852 million) in the first half of this year from a year earlier, the company said in a statement on Thursday. Profit at Astra’s automotive business — which accounts for the bulk of the company’s revenue — declined 9 percent to Rp 4 trillion, due to competitive discounting of vehicles, weaker consumer spending in commodity-producing regions and a tougher down payment policy. Still, earnings at other businesses — finance, heavy equipment, agribusiness, infrastructure, logistics and information and technology — were higher. Prijono Sugiarto, the president director of Astra, remains upbeat despite the performance of the automotive business, saying that the “financial performance by the end of the year is likely to remain good.”]]> Jakarta. Astra International, a Jakarta-based diversified conglomerate, reported net income rose 11 percent to Rp 9.8 trillion ($852 million) in the first half of this year from a year earlier, the company said in a statement on Thursday. Profit at Astra’s automotive business — which accounts for the bulk of the company’s revenue — declined 9 percent to Rp 4 trillion, due to competitive discounting of vehicles, weaker consumer spending in commodity-producing regions and a tougher down payment policy. Still, earnings at other businesses — finance, heavy equipment, agribusiness, infrastructure, logistics and information and technology — were higher. Prijono Sugiarto, the president director of Astra, remains upbeat despite the performance of the automotive business, saying that the “financial performance by the end of the year is likely to remain good.”]]> http://www.thejakartaglobe.com/?p=309849 Asian Economies to Struggle on Weak Export Demand http://www.thejakartaglobe.com/?p=309815 Thu, 24 Jul 2014 16:39:41 +0700 A soldier checks sacks of rice at a warehouse in Ayutthaya province, north of Bangkok on July 3, 2014. (Reuters Photo/Chaiwat Subprasom) A soldier checks sacks of rice at a warehouse in Ayutthaya province, north of Bangkok on July 3, 2014. (Reuters Photo/Chaiwat Subprasom)[/caption] Bangalore. The outlook for emerging Asia has dimmed further this year on weak demand for exports, although growth in India is expected to accelerate into 2015 even as China is held back in part by a slowing property market, Reuters polls showed. China and India have been stung by the West’s slow recovery from the Great Recession and, adding to the problem, both countries have struggled to implement reforms at home to boost productivity and consumer spending. But signs of stabilization have emerged in China, the world’s second-largest economy, which grew by a slightly faster-than-expected annual 7.5 percent in April-June, thanks to a raft of government stimulus measures. Chinese manufacturing expanded at its fastest pace in 18 months in July, according to a preliminary HSBC survey of purchasing managers on Thursday. However, economists in the Reuters survey conducted from July 17-23 were wary about pushing growth forecasts much higher. They now expect the Chinese economy to grow 7.4 percent in 2014, a modest increase from the 7.3 percent predicted in April, according to 44 respondents. They expect growth to slow to 7.2 percent next year. That underlines the limited effect that government stimulus measures have had so far and reflects worries that a property market slump could worsen and hurt the broader economy. Chinese exports rose 7.2 percent in June from a year before, lower than expected. They were up only about 0.9 percent in the first half compared with a year earlier, compared with year-on-year growth of close to 10 percent in January to June 2013. “The mini-stimulus measures have helped to support growth in the second quarter but we see some downside risks stemming from a property market correction due to oversupply and uncertain external demand,” said Jian Chang, an economist at Barclays in Hong Kong. Economists in the poll also cut 2014 growth forecasts for India, Indonesia, the Philippines, South Korea and Thailand while Australia and Malaysia were predicted to expand at a slightly faster pace. The forecast for Thailand was cut the most after months of political turmoil that led to a military coup in May, as well as the continuing weakness of exports. Its economy is expected to grow by just 1.8 percent in 2014, down from the 2.6 percent forecast in April. The Thai economy is then seen expanding 4.0 percent next year. Most other economies are also expected to perform slightly better in 2015. For India, economists pencilled in 5.3 percent growth for the current fiscal year, down from the 5.5 percent seen in April. For now, they fail to share the enthusiasm of investors for the new government of Prime Minister Narendra Modi. His landslide election win two months ago has helped send Mumbai’s Sensex index up more than 24 percent this year. Most Asian countries have begun increasing exports to the United States as its economy has rebounded following a dismal start to 2014 but orders to the euro zone, China and regional trade partners have stagnated or slipped. “Despite the pick-up in exports to the US, emerging market shipments excluding those from China have yet to rise broadly,” said David Hensley, an economist at JP Morgan. High inflation in the region has limited the scope for any easing in monetary policy and almost all major central banks in the region are likely to hold interest rates steady until the end of next year, resisting pressure to stimulate demand. Only the Bank of Korea is expected to cut its base rate, by 25 basis points to 2.25 percent sometime in the third quarter. In contrast, both the Federal Reserve and the Bank of England are expected to raise interest rates by the middle of next year, although the absence of wage inflation there could delay any move. The outlook for Asia was, however, better than for Latin American economies, where Brazil is seen managing just 1.1 percent growth this year. Reuters]]> A soldier checks sacks of rice at a warehouse in Ayutthaya province, north of Bangkok on July 3, 2014. (Reuters Photo/Chaiwat Subprasom) A soldier checks sacks of rice at a warehouse in Ayutthaya province, north of Bangkok on July 3, 2014. (Reuters Photo/Chaiwat Subprasom)[/caption] Bangalore. The outlook for emerging Asia has dimmed further this year on weak demand for exports, although growth in India is expected to accelerate into 2015 even as China is held back in part by a slowing property market, Reuters polls showed. China and India have been stung by the West’s slow recovery from the Great Recession and, adding to the problem, both countries have struggled to implement reforms at home to boost productivity and consumer spending. But signs of stabilization have emerged in China, the world’s second-largest economy, which grew by a slightly faster-than-expected annual 7.5 percent in April-June, thanks to a raft of government stimulus measures. Chinese manufacturing expanded at its fastest pace in 18 months in July, according to a preliminary HSBC survey of purchasing managers on Thursday. However, economists in the Reuters survey conducted from July 17-23 were wary about pushing growth forecasts much higher. They now expect the Chinese economy to grow 7.4 percent in 2014, a modest increase from the 7.3 percent predicted in April, according to 44 respondents. They expect growth to slow to 7.2 percent next year. That underlines the limited effect that government stimulus measures have had so far and reflects worries that a property market slump could worsen and hurt the broader economy. Chinese exports rose 7.2 percent in June from a year before, lower than expected. They were up only about 0.9 percent in the first half compared with a year earlier, compared with year-on-year growth of close to 10 percent in January to June 2013. “The mini-stimulus measures have helped to support growth in the second quarter but we see some downside risks stemming from a property market correction due to oversupply and uncertain external demand,” said Jian Chang, an economist at Barclays in Hong Kong. Economists in the poll also cut 2014 growth forecasts for India, Indonesia, the Philippines, South Korea and Thailand while Australia and Malaysia were predicted to expand at a slightly faster pace. The forecast for Thailand was cut the most after months of political turmoil that led to a military coup in May, as well as the continuing weakness of exports. Its economy is expected to grow by just 1.8 percent in 2014, down from the 2.6 percent forecast in April. The Thai economy is then seen expanding 4.0 percent next year. Most other economies are also expected to perform slightly better in 2015. For India, economists pencilled in 5.3 percent growth for the current fiscal year, down from the 5.5 percent seen in April. For now, they fail to share the enthusiasm of investors for the new government of Prime Minister Narendra Modi. His landslide election win two months ago has helped send Mumbai’s Sensex index up more than 24 percent this year. Most Asian countries have begun increasing exports to the United States as its economy has rebounded following a dismal start to 2014 but orders to the euro zone, China and regional trade partners have stagnated or slipped. “Despite the pick-up in exports to the US, emerging market shipments excluding those from China have yet to rise broadly,” said David Hensley, an economist at JP Morgan. High inflation in the region has limited the scope for any easing in monetary policy and almost all major central banks in the region are likely to hold interest rates steady until the end of next year, resisting pressure to stimulate demand. Only the Bank of Korea is expected to cut its base rate, by 25 basis points to 2.25 percent sometime in the third quarter. In contrast, both the Federal Reserve and the Bank of England are expected to raise interest rates by the middle of next year, although the absence of wage inflation there could delay any move. The outlook for Asia was, however, better than for Latin American economies, where Brazil is seen managing just 1.1 percent growth this year. Reuters]]> http://www.thejakartaglobe.com/?p=309815 Indonesia Says to Take Stern Action Against Newmont Over Contract Dispute http://www.thejakartaglobe.com/?p=309809 Thu, 24 Jul 2014 16:29:13 +0700 A view of mining machinery loading ore from stockpiles onto a truck at Newmont Mining’s copper and gold mine on Sumbawa island in this Sept. 21, 2012 file photo. (Reuters Photo/Neil Chatterjee) A view of mining machinery loading ore from stockpiles onto a truck at Newmont Mining’s copper and gold mine on Sumbawa island in this Sept. 21, 2012 file photo. (Reuters Photo/Neil Chatterjee)[/caption] Jakarta. Indonesia’s president has said the government will take stern action against Newmont Mining, which has filed for international arbitration over the country’s mineral export tax, the nation’s chief economics minister quoted him as saying. The comments by Susilo Bambang Yudhoyono are the harshest so far in the months’ long dispute over new rules intended to derive more income from the country’s huge mineral resources. A Newmont spokesman had said on Wednesday it was negotiating with Indonesia to resume copper concentrate exports after it sought arbitration of the issue. “The government will take stern action towards Newmont,” chief economics minister Chairul Tanjung quoted Yudhoyono as saying. He added that the president had expressed disappointment over Newmont’s attitude and said it did not value working in Indonesia. Reuters]]> A view of mining machinery loading ore from stockpiles onto a truck at Newmont Mining’s copper and gold mine on Sumbawa island in this Sept. 21, 2012 file photo. (Reuters Photo/Neil Chatterjee) A view of mining machinery loading ore from stockpiles onto a truck at Newmont Mining’s copper and gold mine on Sumbawa island in this Sept. 21, 2012 file photo. (Reuters Photo/Neil Chatterjee)[/caption] Jakarta. Indonesia’s president has said the government will take stern action against Newmont Mining, which has filed for international arbitration over the country’s mineral export tax, the nation’s chief economics minister quoted him as saying. The comments by Susilo Bambang Yudhoyono are the harshest so far in the months’ long dispute over new rules intended to derive more income from the country’s huge mineral resources. A Newmont spokesman had said on Wednesday it was negotiating with Indonesia to resume copper concentrate exports after it sought arbitration of the issue. “The government will take stern action towards Newmont,” chief economics minister Chairul Tanjung quoted Yudhoyono as saying. He added that the president had expressed disappointment over Newmont’s attitude and said it did not value working in Indonesia. Reuters]]> http://www.thejakartaglobe.com/?p=309809 Profit at Bumi Serpong Damai, Pakuwon Jati Rise in First Half http://www.thejakartaglobe.com/?p=309801 Thu, 24 Jul 2014 16:12:25 +0700 Jakarta. Bumi Serpong Damai, the property unit of Sinar Mas Land, reported a 73 percent increase in profit for the first half of this year, thanks to the purchase of a stake in  property developer Plaza Indonesia Realty. Net income rose to Rp 2.6 trillion ($226 million) in the January-June period from Rp 1.5 trillion a year earlier, according to the company’s filing to the Indonesia Stock Exchange (IDX) on Thursday. In a separate statement, BSD attributed the sharp growth in profit to its purchase of a 34.22 percent in Plaza Indonesia in April, making it the majority shareholder. The company operates the Plaza Indonesia shopping mall in Central Jakarta. Still, BSD’s revenue fell 17 percent to Rp 2.4 trillion. Meanwhile, at Pakuwon Jati, another property developer, net income rose 36 percent to Rp 905.7 billion. Pakuwon’s revenue increased 13 percent to Rp 1.8 trillion. Surabaya-based Pakuwon targets its revenue to grow by between 10 percent to 20 percent this year. Revenue hit Rp 3.03 trillion in 2013.]]> Jakarta. Bumi Serpong Damai, the property unit of Sinar Mas Land, reported a 73 percent increase in profit for the first half of this year, thanks to the purchase of a stake in  property developer Plaza Indonesia Realty. Net income rose to Rp 2.6 trillion ($226 million) in the January-June period from Rp 1.5 trillion a year earlier, according to the company’s filing to the Indonesia Stock Exchange (IDX) on Thursday. In a separate statement, BSD attributed the sharp growth in profit to its purchase of a 34.22 percent in Plaza Indonesia in April, making it the majority shareholder. The company operates the Plaza Indonesia shopping mall in Central Jakarta. Still, BSD’s revenue fell 17 percent to Rp 2.4 trillion. Meanwhile, at Pakuwon Jati, another property developer, net income rose 36 percent to Rp 905.7 billion. Pakuwon’s revenue increased 13 percent to Rp 1.8 trillion. Surabaya-based Pakuwon targets its revenue to grow by between 10 percent to 20 percent this year. Revenue hit Rp 3.03 trillion in 2013.]]> http://www.thejakartaglobe.com/?p=309801 Singapore’s Central Bank Says Too Early to Ease Property Curbs http://www.thejakartaglobe.com/?p=309740 Thu, 24 Jul 2014 13:00:59 +0700 An aerial view of the Grange Road area in Singapore, on Sept. 21, 2013. (Bloomberg Photo/Nicky Loh) An aerial view of the Grange Road area in Singapore, on Sept. 21, 2013. (Bloomberg Photo/Nicky Loh)[/caption] Monetary Authority of Singapore said it’s too early for the city-state to ease property measures that are helping curb surging residential prices. “Property prices, they remain at elevated levels, although they’ve just started to soften,” Ravi Menon, managing director of the MAS, as the central bank is known, at the release of its 2013-14 annual report on Thursday. “It’s very important that we secure the gains that we’ve made in stabilizing the market and restoring financial prudence.” Debt levels among highly leveraged households remain high, Menon said. The MAS has narrowed its 2014 inflation forecast to between 1.5 percent and 2 percent from 1.5 percent to 2.5 percent as the property curbs helped stabilize prices and rents, Menon said. Residential values in the city-state slid for a third quarter in the three months to June to post the longest losing streak in five years after the government introduced loan measures last June, widening a campaign that began in 2009 to curb speculation. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, who’s also chairman of the central bank, said on July 4 that a further correction in the Singapore property market would not be unexpected. Further declines Home prices in Singapore will probably extend declines as the government sticks with curbs, according to Keppel Land, signaling further losses for Asia’s second-most expensive housing market. “Home prices are expected to continue to moderate,” chief executive Ang Wee Gee said at a results briefing yesterday. “Singapore is unlikely to relax property-cooling measures in the short term.” The index tracking 49 property companies in the island-state declined 0.3 percent in Singapore trading as of 12:13 p.m. local time, the first drop in eight days. “I don’t see the government relaxing the curbs for a year,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. “Developers that have deep pockets may not be under tremendous pressure to cut prices.” Bloomberg]]> An aerial view of the Grange Road area in Singapore, on Sept. 21, 2013. (Bloomberg Photo/Nicky Loh) An aerial view of the Grange Road area in Singapore, on Sept. 21, 2013. (Bloomberg Photo/Nicky Loh)[/caption] Monetary Authority of Singapore said it’s too early for the city-state to ease property measures that are helping curb surging residential prices. “Property prices, they remain at elevated levels, although they’ve just started to soften,” Ravi Menon, managing director of the MAS, as the central bank is known, at the release of its 2013-14 annual report on Thursday. “It’s very important that we secure the gains that we’ve made in stabilizing the market and restoring financial prudence.” Debt levels among highly leveraged households remain high, Menon said. The MAS has narrowed its 2014 inflation forecast to between 1.5 percent and 2 percent from 1.5 percent to 2.5 percent as the property curbs helped stabilize prices and rents, Menon said. Residential values in the city-state slid for a third quarter in the three months to June to post the longest losing streak in five years after the government introduced loan measures last June, widening a campaign that began in 2009 to curb speculation. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, who’s also chairman of the central bank, said on July 4 that a further correction in the Singapore property market would not be unexpected. Further declines Home prices in Singapore will probably extend declines as the government sticks with curbs, according to Keppel Land, signaling further losses for Asia’s second-most expensive housing market. “Home prices are expected to continue to moderate,” chief executive Ang Wee Gee said at a results briefing yesterday. “Singapore is unlikely to relax property-cooling measures in the short term.” The index tracking 49 property companies in the island-state declined 0.3 percent in Singapore trading as of 12:13 p.m. local time, the first drop in eight days. “I don’t see the government relaxing the curbs for a year,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. “Developers that have deep pockets may not be under tremendous pressure to cut prices.” Bloomberg]]> http://www.thejakartaglobe.com/?p=309740 Indonesia’s FDI Rises 16.9% in Second Quarter http://www.thejakartaglobe.com/?p=309720 Thu, 24 Jul 2014 12:38:06 +0700 Cranes stand at the Tanjung Priok port, operated by state-owned Pelabuhan Indonesia II. (Bloomberg Photo/Dimas Ardian) Cranes stand at the Tanjung Priok port, operated by state-owned Pelabuhan Indonesia II. (Bloomberg Photo/Dimas Ardian)[/caption] Jakarta. Growth in foreign direct investment in Indonesia started to pick up in the second quarter this year led by the transport, warehouse and telecommunication sectors, after slumping in the first quarter, data showed on Thursday. The Investment Coordinating Board (BKPM) said on Thursday that foreign investment commitments rose 16.9 percent in April-June compared with the same period of 2013, reaching Rp 78 trillion ($6.77 billion). The rate used by the board is 10,500 rupiah per dollar which compares with the current actual rate of around 11,500. The Group of 20 member’s FDI growth in the first quarter had slowed sharply compared with its pace in recent years. FDI was up only 9.8 percent from the first quarter last year, whereas growth in the first quarter 2013 was 27.2 percent. There has been concern that foreign investor appetite for Southeast Asia’s biggest economy might wane after the government ban of mineral ore exports in January. The FDI data does not include investment in the oil, gas, and banking sectors. Reuters]]> Cranes stand at the Tanjung Priok port, operated by state-owned Pelabuhan Indonesia II. (Bloomberg Photo/Dimas Ardian) Cranes stand at the Tanjung Priok port, operated by state-owned Pelabuhan Indonesia II. (Bloomberg Photo/Dimas Ardian)[/caption] Jakarta. Growth in foreign direct investment in Indonesia started to pick up in the second quarter this year led by the transport, warehouse and telecommunication sectors, after slumping in the first quarter, data showed on Thursday. The Investment Coordinating Board (BKPM) said on Thursday that foreign investment commitments rose 16.9 percent in April-June compared with the same period of 2013, reaching Rp 78 trillion ($6.77 billion). The rate used by the board is 10,500 rupiah per dollar which compares with the current actual rate of around 11,500. The Group of 20 member’s FDI growth in the first quarter had slowed sharply compared with its pace in recent years. FDI was up only 9.8 percent from the first quarter last year, whereas growth in the first quarter 2013 was 27.2 percent. There has been concern that foreign investor appetite for Southeast Asia’s biggest economy might wane after the government ban of mineral ore exports in January. The FDI data does not include investment in the oil, gas, and banking sectors. Reuters]]> http://www.thejakartaglobe.com/?p=309720 ADB to Loan Up to $50m for S. Sumatra Geothermal Project http://www.thejakartaglobe.com/?p=309703 Thu, 24 Jul 2014 12:26:30 +0700 A file photo shows a power plant supported by geothermal energy belonging to Pertamina Geothermal Energy in Kamojang on April 22, 2010.  (AFP Photo/Adek Berry) A file photo shows a power plant supported by geothermal energy belonging to Pertamina Geothermal Energy in Kamojang on April 22, 2010. (AFP Photo/Adek Berry)[/caption] Jakarta. The Asian Development Bank is allocating a loan of up to $50 million to finance the development and exploration phase of the Rantau Dedap geothermal project in South Sumatra. “This innovative loan demonstrates the depth of ADB support for deploying clean energy technologies that can significantly displace coal and oil-fired power,” Lazeena Rahman, investment specialist at Manila-based ADB, said in a statement on Thursday. The Rantau Dedap geothermal project — which is being developed by Supreme Energy Rantau Dedap, a geothermal services company — would support geothermal power plants with capacity of at least 240 megawatts. Operation of the facility is expected to reduce carbon dioxide emissions of as much as 1.1 million tons per year, the ADB said. The ongoing project will be implemented under a 35-year geothermal operating license, a 30-year energy sales contract with Perusahaan Listrik Negara, Indonesia’s electricity utility company and a business viability guarantee from the Ministry of Finance, the ADB said. ADB says that Indonesia has the potential to produce 29,000 MW from geothermal sources but less than 5 percent of this potential has been developed. Investment for geothermal facilities tends to be high because of their locations in forested areas, and developing the sites can be costly. “Proving commercial viability for a geothermal project requires a much higher upfront investment than for any conventional fossil fuel project,” ADB said.]]> A file photo shows a power plant supported by geothermal energy belonging to Pertamina Geothermal Energy in Kamojang on April 22, 2010.  (AFP Photo/Adek Berry) A file photo shows a power plant supported by geothermal energy belonging to Pertamina Geothermal Energy in Kamojang on April 22, 2010. (AFP Photo/Adek Berry)[/caption] Jakarta. The Asian Development Bank is allocating a loan of up to $50 million to finance the development and exploration phase of the Rantau Dedap geothermal project in South Sumatra. “This innovative loan demonstrates the depth of ADB support for deploying clean energy technologies that can significantly displace coal and oil-fired power,” Lazeena Rahman, investment specialist at Manila-based ADB, said in a statement on Thursday. The Rantau Dedap geothermal project — which is being developed by Supreme Energy Rantau Dedap, a geothermal services company — would support geothermal power plants with capacity of at least 240 megawatts. Operation of the facility is expected to reduce carbon dioxide emissions of as much as 1.1 million tons per year, the ADB said. The ongoing project will be implemented under a 35-year geothermal operating license, a 30-year energy sales contract with Perusahaan Listrik Negara, Indonesia’s electricity utility company and a business viability guarantee from the Ministry of Finance, the ADB said. ADB says that Indonesia has the potential to produce 29,000 MW from geothermal sources but less than 5 percent of this potential has been developed. Investment for geothermal facilities tends to be high because of their locations in forested areas, and developing the sites can be costly. “Proving commercial viability for a geothermal project requires a much higher upfront investment than for any conventional fossil fuel project,” ADB said.]]> http://www.thejakartaglobe.com/?p=309703 Semen Indonesia’s First-Half Profit Rises 9.3% http://www.thejakartaglobe.com/?p=309695 Thu, 24 Jul 2014 11:42:00 +0700 Jakarta. Indonesia’s biggest cement maker Semen Indonesia posted a 9.3 percent rise in first-half net profit, lifted by strong demand for construction materials in Southeast Asia’s largest economy. Semen Indonesia reported a net profit of Rp 2.82 trillion ($244.6 million) for the six months ended June, up from Rp 2.58 trillion a year ago. Reuters]]> Jakarta. Indonesia’s biggest cement maker Semen Indonesia posted a 9.3 percent rise in first-half net profit, lifted by strong demand for construction materials in Southeast Asia’s largest economy. Semen Indonesia reported a net profit of Rp 2.82 trillion ($244.6 million) for the six months ended June, up from Rp 2.58 trillion a year ago. Reuters]]> http://www.thejakartaglobe.com/?p=309695 Indonesia to Allow Freeport to Resume Copper Concentrate Exports: Official http://www.thejakartaglobe.com/?p=309683 Thu, 24 Jul 2014 12:32:23 +0700 An aerial view shows the site of the Grasberg Mine, which is operated by US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin) An aerial view shows the site of the Grasberg Mine, which is operated by US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin)[/caption] [Updated at 12:30 p.m. on Thursday, July 24, 2014] Jakarta. Indonesia will soon allow US miner Freeport-McMoRan to resume copper exports, with both sides close to ending a six-month dispute over new mining rules, a senior official said on Thursday. However, there has been no such progress between the government and US miner Newmont Mining, which has filed for international arbitration over the country’s mineral export tax, Sukhyar, director general of coal and minerals at the mining ministry, told Reuters. Indonesia introduced a mineral ore export ban and a steep export tax on concentrates in January. Overall, the decision halted $500 million of exports a month in Southeast Asia’s biggest economy and one of the world’s most resource-rich nations. Indonesia’s top two copper miners, which account for 97 percent of the nation’s copper output, have taken divergent paths in dealing with the government over the rules. While Freeport had engaged in behind-the-scenes talks, Newmont suspended operation at its Batu Hijau mine and filed for international arbitration, drawing a rebuke from the Indonesian government. The government is expected to grant Freeport an export permit within two weeks, Sukhyar said. The comments came as Indonesian President-Elect Joko Widodo prepares to assume power in October, which will take some of the pressure off the new government to resolve the dispute. Freeport said on Wednesday it expected to “imminently” sign an agreement with Indonesia that would enable it to immediately resume copper concentrate exports. Newmont also said it was negotiating a memorandum of understanding that could restart stalled shipments. But the government denied such talks had taken place. “There have been no MOU discussion with Newmont. None at all,” Sukhyar said. “The government’s position is we will face them in court. Arizona-based Freeport said on July 8 it had agreed on a draft memorandum of understanding with the Indonesian government but had not signed it. At the time, it gave no time frame on when it would resume exports. “It is a compromise to create a bridge for us so that we can return to normal operations,” Freeport chief executive Richard Adkerson said of the MoU in an earnings call with analysts and investors. Under the agreement, Freeport would pay a “significantly reduced” export duty in 2014, 2015 and 2016 but higher royalties on copper and gold sales. It would also pay a $115 million “assurance bond” against development of a smelter, Adkerson said. Rules aimed at spurring more smelters Freeport, which owns and operates the massive Grasberg mine in eastern Indonesia, wants financial incentives from the government to build a new smelter. Indonesia imposed the new rules partly to spur construction of smelters in the country, but miners have said building new capacity does not make economic sense. Adkerson said the negotiations also involve agreeing on terms to extend Freeport’s operations beyond 2021, when its current contract with the government expires. An Indonesian cabinet meeting with outgoing President Susilo Bambang Yudhoyono was due to discuss the issue later on Thursday. News of a potential breakthrough caused little immediate market reaction. Copper on the London Metal Exchange (LME) was trading flat at $7,043.75 a tonne in early Asian trade. A North America-based concentrates trader said any resumption in exports from Indonesia would not be enough to dramatically increase supply, but would renew expectations of an oversupply in the market. “A lot of people expected the market to be over-supplied,” he said, adding that recent delays to mine output expansions had led to tighter conditions. Newmont spokesman Omar Jabara said on Wednesday that officials from the company’s Indonesian unit have been in ongoing meetings with the government. He did not give details on terms or when exports could resume but said: “We hope to reach an agreement with the government of Indonesia on an MOU or memorandum of understanding, which we would expect would lead to issuance of an export permit.” President-Elect Joko said on Tuesday he planned to sit down with Freeport and other miners to resolve the minerals row, but gave no other details. Reuters  ]]> An aerial view shows the site of the Grasberg Mine, which is operated by US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin) An aerial view shows the site of the Grasberg Mine, which is operated by US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin)[/caption] [Updated at 12:30 p.m. on Thursday, July 24, 2014] Jakarta. Indonesia will soon allow US miner Freeport-McMoRan to resume copper exports, with both sides close to ending a six-month dispute over new mining rules, a senior official said on Thursday. However, there has been no such progress between the government and US miner Newmont Mining, which has filed for international arbitration over the country’s mineral export tax, Sukhyar, director general of coal and minerals at the mining ministry, told Reuters. Indonesia introduced a mineral ore export ban and a steep export tax on concentrates in January. Overall, the decision halted $500 million of exports a month in Southeast Asia’s biggest economy and one of the world’s most resource-rich nations. Indonesia’s top two copper miners, which account for 97 percent of the nation’s copper output, have taken divergent paths in dealing with the government over the rules. While Freeport had engaged in behind-the-scenes talks, Newmont suspended operation at its Batu Hijau mine and filed for international arbitration, drawing a rebuke from the Indonesian government. The government is expected to grant Freeport an export permit within two weeks, Sukhyar said. The comments came as Indonesian President-Elect Joko Widodo prepares to assume power in October, which will take some of the pressure off the new government to resolve the dispute. Freeport said on Wednesday it expected to “imminently” sign an agreement with Indonesia that would enable it to immediately resume copper concentrate exports. Newmont also said it was negotiating a memorandum of understanding that could restart stalled shipments. But the government denied such talks had taken place. “There have been no MOU discussion with Newmont. None at all,” Sukhyar said. “The government’s position is we will face them in court. Arizona-based Freeport said on July 8 it had agreed on a draft memorandum of understanding with the Indonesian government but had not signed it. At the time, it gave no time frame on when it would resume exports. “It is a compromise to create a bridge for us so that we can return to normal operations,” Freeport chief executive Richard Adkerson said of the MoU in an earnings call with analysts and investors. Under the agreement, Freeport would pay a “significantly reduced” export duty in 2014, 2015 and 2016 but higher royalties on copper and gold sales. It would also pay a $115 million “assurance bond” against development of a smelter, Adkerson said. Rules aimed at spurring more smelters Freeport, which owns and operates the massive Grasberg mine in eastern Indonesia, wants financial incentives from the government to build a new smelter. Indonesia imposed the new rules partly to spur construction of smelters in the country, but miners have said building new capacity does not make economic sense. Adkerson said the negotiations also involve agreeing on terms to extend Freeport’s operations beyond 2021, when its current contract with the government expires. An Indonesian cabinet meeting with outgoing President Susilo Bambang Yudhoyono was due to discuss the issue later on Thursday. News of a potential breakthrough caused little immediate market reaction. Copper on the London Metal Exchange (LME) was trading flat at $7,043.75 a tonne in early Asian trade. A North America-based concentrates trader said any resumption in exports from Indonesia would not be enough to dramatically increase supply, but would renew expectations of an oversupply in the market. “A lot of people expected the market to be over-supplied,” he said, adding that recent delays to mine output expansions had led to tighter conditions. Newmont spokesman Omar Jabara said on Wednesday that officials from the company’s Indonesian unit have been in ongoing meetings with the government. He did not give details on terms or when exports could resume but said: “We hope to reach an agreement with the government of Indonesia on an MOU or memorandum of understanding, which we would expect would lead to issuance of an export permit.” President-Elect Joko said on Tuesday he planned to sit down with Freeport and other miners to resolve the minerals row, but gave no other details. Reuters  ]]> http://www.thejakartaglobe.com/?p=309683