(Adds U.S. vice president's expected visit to Indonesia,
background, paragraphs 5, 10-12)
By Mitra Taj
SANTIAGO, April 5 Freeport McMoRan Inc
is awaiting final details on a temporary export permit in
Indonesia, which would end a 12-week ban that has cost the
world's biggest publicly traded copper company nearly $1 billion
in lost revenues, its top executives told Reuters in an
interview on Wednesday.
"With the short-term arrangement, we'll start ramping
production back up to feed our mill 100 percent," said Chief
Financial Officer Kathleen Quirk referring to Freeport's
"It shouldn't take very long, we're talking weeks," she
said, alongside Chief Executive Officer Richard Adkerson, at the
CRU World Copper Conference in Santiago.
Indonesia banned miners from exporting copper concentrate on
Jan. 12 under new rules aimed at boosting the Southeast Asian
nation's domestic smelting industry.
For each month exports are banned, Grasberg output is
reduced by 70 million pounds of copper, Freeport
Freeport is required to adopt a special license, that
includes new taxes and royalties, divesting a 51 percent stake
in its operations and relinquishing arbitration rights.
The Phoenix-based company has lost revenues "approaching $1
billion," under the export stoppage, said Quirk, mitigated by
cost and capital spending cuts. It is unlikely deferred capital
spending will resume until a long-term mining agreement is
reached, said Adkerson.
Under a temporary permit, extending to October, Freeport
could resume copper concentrate exports from Grasberg, the
world's second-biggest copper mine, while negotiating
contentious issues that have prevented a longer-term agreement,
including divestment, economic and legal protection and domestic
Freeport plans to boost Grasberg production from 40 percent
currently to full capacity in a matter of weeks after receiving
the short-term permit, Quirk said.
Freeport insists any new permit must have the same fiscal
and legal guarantees as under its 30-year mining contract. The
company has warned that if the matter is unresolved by June 17,
it could go to arbitration and seek damages. A
temporary permit does not affect that timeline, but Adkerson
said there is no reason for arbitration if negotiations
Shareholder pressure is mounting on Freeport to stand up to
the government. The issue could emerge during a visit to
Indonesia by U.S. Vice President Mike Pence this month, part of
a larger Asian tour reported by the media.
Freeport's ban, coupled with a strike at BHP Billiton's
Escondida mine in Chile, the world's biggest
copper mine, pushed copper prices to 20-month highs of
$6,204 a tonne on the London Metal Exchange in February.
(Reporting by Mitra Taj and Felipe Iturriet in Santiago,
writing by Susan Taylor in Toronto in Vancouver; Editing by
David Gregorio and W Simon)