Freeport Seeks New Mine Deal with Indonesia

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  • TEMPO.CO, JakartaFreeport - McMoRan Inc. announced it is seeking a new mining deal with the Indonesian Government to the Grasberg mine in Timika, Papua. The information said by Freeport chief financial officer Kathleen Quirk.

    Freeport has resumed its copper exports from the Grasberg mine since April after an outage due to a government dispute over mining rights. The US-based mining giant will boost its production to cover losses during the outage.

    Read: Wanted a Win-Win Agreement with Freeport

    Earlier in January, the Indonesian government decided to halt Freeport’s copper exports to push the company to build a smelter, pay new taxes and royalties, divest a 51 percent stake in their operations and relinquish arbitration rights.

    Freeport, whose contract will last until 2021 with two 10-year extensions, will only agree to a special permit accompanied by an investment stability agreement that replicates current legal and fiscal certainty.

    “We think we’re on a path to be able to get that resolved during this year and that’s our top priority,” Quirk said at a Deutsche Bank conference, as quoted by Reuters on Friday, June 9, 2017.

    Quirk said that without the agreement, Freeport is unlikely to continue investing in the country, noting that the company has already spent US$3 billion on a project to transitions Grasberg underground from open pit mining.

    In addition, Freeport is still struggling with labor problems. It is contractor-dominated workforce in Indonesia has been reduced to approximately 26,000 workers currently from about 33,000 at the start of 2017.