REPUBLIKA.CO.ID, JAKARTA - Indonesia's mining ministry recommended a sharp cut in the export tax imposed on Freeport McMoRan Copper & Gold Inc and Newmont Mining Corp after they promised to build a smelter, a senior official said on Friday.

The two companies halted nearly 4 billion USD worth of annual copper shipments in January, after the government imposed an unexpected 25 percent export tax on shipments to force miners to process their raw minerals domestically.

The mining ministry recommended that finance officials lower the export tax to no more than 10 percent for Freeport and Newmont, but the firms did not want to pay more than 5 percent, mineral enterprise director Dede Suhendra told reporters.

"We (mining ministry) proposed to the finance ministry that the export tax for Freeport and Newmont should be no more than 10 percent because they have already committed to paying a deposit of 5 percent to build a new smelter," Suhendra said. "But they asked to pay no more than 5 percent."

Both Freeport and Newmont, which could not be reached for comment on Friday, still need finance ministry approval before resuming copper concentrate exports. The deputy finance minister last month told Reuters the government had reached a deal with the two companies over the export tax and expected copper shipments would resume by the end of April.

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