US mining giant Newmont yesterday said it was placing thousands of workers at its Indonesian copper mine on leave and declared force majeure to avoid liability on existing orders, blaming new rules governing the sector.
It came two days after the miner, one of the biggest in resource-rich Indonesia, said that it was ceasing copper production at the Batu Hijau site as it has not exported for months due to the new regulations.
Southeast Asia’s top economy introduced the rules in January. They include a ban on the export of some unprocessed minerals and higher taxes for some commodities that can still be shipped out of the country.
It is one of a raft of economic policies pushed by nationalist politicians, who argue that Indonesia is losing out in potentially lucrative industries as foreign firms are reaping all the profits.
Copper concentrate, a partially processed product that is a major export for Newmont and its US peer Freeport-McMoRan, was exempt from the ban, but the companies still faced paying the new, higher taxes on shipments.
However, Newmont has refused, saying the new levies conflict with its original agreements in Indonesia. Newmont and Freeport have been engaged in talks with the government to try to reach agreement.
The company said it would place 80 percent of its 4,000 employees at the mine on leave with reduced pay from today.
Martiono Hadianto, the head of Newmont’s Indonesian unit, said the company was “left with no option, but to declare force majeure.”
Force majeure is a legal term releasing a company from obligation to fulfil existing contracts with its customers when faced with circumstances beyond its control.
Company spokesman Rubi Purnomo said that force majeure was declared because “the company could not fulfil its obligation to produce and operate” at the mine on Sumbawa island, in central Indonesia.
The new rules are aimed at forcing foreign companies to build smelters and process raw minerals in Indonesia, but Newmont and Freeport say this is not economically viable.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to