Indonesia issues copper export permit recommendation for Freeport-McMoRan

9 February 2016 (Last Updated February 9th, 2016 18:30)

Indonesia's Energy and Mineral Resources Ministry has issued a copper export permit to Freeport-McMoRan, allowing the company to restart shipments from its Grasberg mine in Papua again.

Grasberg

Indonesia's Energy and Mineral Resources Ministry has issued a copper export permit to Freeport-McMoRan, allowing the company to restart shipments from its Grasberg mine in Papua again.

The latest permit issued for a period of six months will put an end to a two-week stoppage of export following expiry of the previous one on 28 January 2016.

Freeport-McMoRan was forced to stop overseas shipments from the Grasberg mine after the Indonesian Government demanded it pay a $530m deposit initially for a new smelter before approving a new export permit.

In 2015, Freeport is believed to have extracted $1.7bn of copper and $1.4bn of gold from the Grasberg mine.

Furthermore, the company aims to extend its contract until 2021 to operate in Indonesia.

"In 2015, Freeport is believed to have extracted $1.7bn of copper and $1.4bn of gold from the Grasberg mine."

In October 2015, PT Freeport Indonesia and the Government of Indonesia agreed on continuing operations of the Grasberg mining complex beyond 2021.

Freeport has plans to make $18bn investment to expand its operations at the mine, and is seeking assurances from the government that it will get a contract extension.

Majority of the Grasberg mine is owned by Freeport-McMoRan, which owns 90.64% of PT Freeport Indonesia, the company's principal operating subsidiary in Indonesia, including 9.36% owned through its wholly-owned subsidiary, PT Indocopper Investama.

The Government of Indonesia owns the remaining 9.36% of PT Freeport Indonesia.

In 2014, exports from Grasberg were interrupted following a dispute with the Indonesian government over export duties.


Image: Grasberg mine open pit. Photo: courtesy of Alfindra Primaldhi.