UPDATE 3-Indonesia threatens to take over Newmont mine if output stays shut

Thu Jul 17, 2014 3:34pm EDT
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* Newmont's copper mining licence may be given to state-run Antam

* Govt to send letter soon to Newmont citing contract default

* Newmont says cannot restart production as storage is full

* President directs state to start preparing to defend case in court (Adds Newmont response)

By Wilda Asmarini and Fergus Jensen

JAKARTA, July 17 (Reuters) - Newmont Mining Corp risks its Indonesian mining licence being taken over by a state-owned firm if the U.S. miner does not resume copper production, the Southeast Asian nation warned, escalating a six-month dispute over export rules.

The move represents a hardening of the stance of Indonesia's outgoing government. The mining ministry earlier this week said it could terminate Newmont's mining contract in response to the miner stopping production and filing legal arbitration over the export rules.

The developments mark the latest twist in the dispute between Indonesia and U.S. miners Newmont and Freeport-McMoRan Inc that has led to a halt in copper concentrate shipments from Southeast Asia's biggest economy.

Indonesia plans to soon send a letter to Newmont saying that the company has defaulted on its contract, said Sukhyar, director general of coal and minerals at the mining ministry.   Continued...