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Freeport to cut stake in Indonesia mine after gov't pressure

by August 29, 2017 General

Indonesia is allowing Freeport-McMoRan to continue operating a giant gold and copper mine after the U.S. company agreed Tuesday to relinquish majority ownership of it to the government.

Indonesia’s Energy and Minerals Minister Ignasius Jonan told a news conference that Phoenix, Arizona-based Freeport-McMoRan Copper & Gold Inc. could operate the mine in easternmost Papua until 2041 under a new arrangement with the government.

Details are still to be worked out, but it paves the way to end a lengthy dispute between Freeport and Indonesia that reduced the Grasberg mine’s production in recent months.

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The mine in Papua, where a separatist movement simmers, has been the target of protests by Papuans who resent the region’s mineral wealth being exploited by the U.S. and Indonesia.

The news conference in Jakarta was also attended by Freeport-McMoRan’s CEO Richard Adkerson and Indonesia’s Minister of Finance Sri Mulyani Indrawati.

Jonan said the U.S. company’s subsidiary PT Freeport Indonesia agreed to reduce its ownership of the mine and convert its original agreement signed with the government of former dictator Suharto in 1991 to a special mining license. The original agreement expires in 2021.

Freeport also agreed to increase its investment in smelting in Indonesia, fulfilling a key demand of the government which wants the country to get greater value from its mineral resources.