Mine operator PT Newmont Nusa Tenggara announced today that it would start the ramp-down of production from June 1 unless it could secure an initial export permit.

The process has stalled since last month when the company obtained registered export status from the Indonesian Ministry of Trade.

PTNNT said Batu Hijau's copper concentrate storage facilities would reach capacity by the end of this month, prompting the ramp-down of operations.

Once the facility is full, PTNNT will cease mining and milling and scale back contracted services, purchasing and capital expenditure, with corresponding adjustments in employee work schedules and reductions in overtime.

Some of the mine's 8000 workers will be placed on leave at reduced pay starting early next month.

"We support the government's stated goal of increased domestic processing and continue engaging with the government to resume exports and protect the existing jobs, local businesses and government revenues supported by the export and sale of Batu Hijau's copper concentrate," PTNNT president director Martiono Hadianto said.

"While our contract of work explicitly guarantees our right to export copper concentrate and establishes all the taxes and duties PTNNT is required to pay, we have taken numerous steps to support the government's desire to increase in-country smelting.

"This is a very unfortunate and difficult situation for all of us, as it will disrupt the lives of our 8000 employees and contractors and impact thousands more people in the Sumbawa Barat area who derive their incomes from our operation."

PTNNT said it would continue shipping and selling copper concentrate to PT Smelting in Gresik, Indonesia until the end of the year.

However, the smelter has capacity limitations and cannot take enough of the mine's concentrate to allow it to continue at full production.

The company said discussions with the Indonesian government would continue.

When the Indonesian mineral export ban was first announced, Newmont expressed concerns over the ability to obtain an export permit until the ban would take effect in January 2017.

The company flagged legal action, saying its contract of work was legally valid and the new regulations, which the Indonesian government planned to enforce against the mine, conflicted with that.

In its first quarter results released last month, Newmont flagged the possible scaling back of production if it experienced delays in receiving the export approvals.

Batu Hijau produced 21,000 tonnes of copper and 16,000 ounces of gold in the March quarter and was previously expected to produce 110,000-125,000t copper and 135,000-150,000oz gold this year to Newmont.

Newmont owns 48.5% of the mine.