Batu Hijau Model and Narrative Report

This page contains the Batu Hijau Project Fiscal Model, the accompanying narrative report, and a shortform presentation that have been developed in partnership with PWYP Indonesia. It is the third of a series of such model releases that have been produced during the OpenOil Financial Modeling Sprint.

Batu Hijau is the second biggest copper producer in Indonesia, operated by Newmont Mining under a 4th Indonesia’s Generation Contract of Work.

Discovered in 1990, commercial production began in late 1999. By 2015, Batu Hijau had produced 7.3 billion pounds of copper and 7.1 million ounces of gold. At the end of 2015 proven & probable reserves were 5.4 billion pounds of copper and 5.5 million ounces of gold.

Production was interrupted from 2012 to 2014 due to the expansion of the mine and a brief ban on exports. However even with this, and recent falls in the copper price, the project has a relatively high after-tax IRR of 17%.

The main findings of OpenOil’s model and analysis are:


Narrative report: Batu Hijau, Indonesia.

● Gap between benchmark and actual prices is low (1.1% for copper and 0.6% for gold)

● Government gain 48% from the net cashflow, while the company gain 52%

● Hedging losses of $931 million (2004-6) reduce Newmont’s IRR from 17.5% to 16.5%

● The government will lose $388 million if the hedging loss is deducted from the taxable income

● Royalty rate changes in 2015 triple the forecast royalty, despite shorter LOM

● Double tax treaty reduced government revenue by $912 million

For media inquiries:
Johnny West, Director,
Olumide Abimbola, Head of R&D,

Batu Hijau Fiscal Model


Click on the chart to download a copy of the full model for your own use, under CC-BY-SA 4.0 license.

Supporting documents

Interviews with the modelers

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