Indonesia Extends Permit for Freeport’s Grasberg Copper Mine
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Reuters reported that Indonesia has extended a temporary operating permit for Freeport McMoRan Inc’s Grasberg project, the world’s second-biggest copper mine, until the end of the month while discussions continue over long-term rights. Freeport’s local unit, PT Freeport Indonesia, has been given a temporary operating permit for Grasberg until July 31, Coal and Minerals Director General Bambang Gatot Ariyono told reporters at a press conference on 4 July.
Phoenix, Arizona-based Freeport has been in negotiations with Indonesia to secure long-term operating rights at Grasberg after the government introduced new rules last year aimed at giving Jakarta greater control over the nation’s resources.
Efforts to finalize a deal have been overshadowed by concerns over the environmental impact of the project in the eastern Indonesian province of Papua.
Mr. Ariyono said that “This month we hope all of the aspects — the divestment transaction, investment stability guarantees, the environment, a smelter — all of them are resolved.”
Freeport’s previous temporary operating permit for Grasberg expired on June 30 after being awarded in January.
Freeport’s Grasberg partner Rio Tinto and state-owned mining holding company Inalum are also involved in negotiations on the project, which needs significant investment to develop an underground phase from its current open-pit construction.
Inalum may complete a multi-billion-dollar deal to acquire a majority stake in Grasberg this month, officials said on Saturday, but details on how Freeport will maintain operational control have yet to emerge.
According to Mr. Ariyono, the main issues to be resolved were environmental matters, and discussions were ongoing “between the Environment and Forestry Ministry, the Freeport team and Inalum, who have requested an opportunity to resolve them”.
Other matters, which include a requirement for Freeport to build a second copper smelter and adopt a new tax regime, “are nearly finalized”, he said.
Source: Steel Guru
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