Newmont Mining Corp. (NYSE: NEM), a US-based mining company, could possibly ramp down their gold and copper mining operations in Indonesia. This is due to the uplifted mining taxes imposed by their government.

Earlier this year, the government of Indonesia increased their tax to 25% and expect to uplift it to up to 35% by January 2015.

Newmont Mining believes that the new law imposes conflicts on the contract they have signed where it says that the company will not be affected by any reformation the government will do in the future on their taxes and dues. Because of that, mining operation could possibly be decreased on June 1.

Quoted from the PT Newmont Nusa Tenggara’s website:

“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,” said Martiono Hadianto, PTNNT’s President Director. “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 8,000 employees and contractors and impact thousands of more people in the Sumbawa Barat area who derive their incomes from our operation.”

PTNNT  seeks for better updates and compensations, thus, they still continue the dialogues with the Indonesian government.

Indonesia has a huge deposit of coal, nickel, bauxite and tin. They are also rich in gold and copper.