TEMPO.CO, Jakarta - Freeport stated that they will no longer have an opportunity to do business as usual in the Grasberg mine located in Papua, Indonesia. The parent company of Freeport Indonesia, Freeport-McMoran Inc, stated that they will not be running their operations as they used to do following the feud with the Indonesian government.

“Our operations have been halted following the export ban imposed on us since January 2017,” as stated in Freeport’s document that was reviewed by Reuters on Wednesday, March 1, 2017.

Freeport has trimmed down their copper production from the Grasberg mine for their 2017 target back to 95,000 tons per year, compared to their original target of 140,000 tons per year.

Previously, Freeport shareholders urged the company to be adamant in holding to their Contract of Work also known as CoW, rather than bowing to the requests of the Indonesian government that mandates Freeport in changing their permit into a Special Mining Permit (IUPK).

Freeport-McMoran CEO Richard Adkerson stated that Rio Tinto Plc., Freeport’s partner at the Grasberg mine, also supports their decision in facing the Indonesian government.

“Our shareholders consider that we’ve been too nice towards the Indonesian government. Now is the time to show that we’ll keep holding on to our Contract of Work,” Adkerson said in a conference with investors in Hollywood, Florida, on Monday, February 27, 2017.

Freeport shareholders are in the dozens, either in institutions or fund manager agencies, such as the Capital Research Global Investors who own 10.3 percent of Freeport’s shares, Vanguard Group Inc (8.31 percent), and Icahn Associates Corp (6.31 percent).

Previously on January 11, 2017, President Joko Widodo or Jokowi ratified the Government Regulation (PP) No. 1/2017 regarding the Fourth Change on PP No. 23/2010 on the Implementation of the Business Activities of Mineral and Coal, commonly known as PP Minerba.

The regulation requires CoW holders to purify their minerals in Indonesia. In order to be able to export their products, they must build a smelter in Indonesia and must switch their permit status from a CoW into an IUPK. By changing status into an IUPK, Freeport is obliged to surrender 51 percent of its shares to Indonesia by this year.

Freeport-Mcmoran considers on taking legal action against the Indonesian government. They plan to take the case to the international arbitration within 120 days, which was effective on Monday, February 13, 2017, if the Indonesian Government does not consider their option.

REUTERS | ABDUL MALIK