JAKARTA May 4 Indonesian authorities on
Thursday kicked off negotiations with Freeport McMoran Inc.
over a contract dispute that has prompted the U.S.
mining giant to scale down operations in the eastern province of
CEO Richard Adkerson met with mining ministry officials in
Jakarta to start talks over a range of disagreements including
legal assurances over investments beyond 2021, tax rates, and a
government requirement for Freeport to divest a 51 percent stake
in its local operations.
"We have work to do, issues to discuss, but we're all going
in this with goodwill and optimism about reaching a win-win
situation," Adkerson told reporters after meeting with mining
minister Ignasius Jonan and other officials from the central and
Papua provincial government.
"For Freeport, the key issue is having assurance about our
ability to operate," he added.
Teguh Pamuji, secretary general at the mining ministry, said
the negotiations would focus on fiscal certainty, taxes and
royalties, divestments, and the development of smelters.
The dispute arose after Indonesia revised its mining rules
in January, which brought Freeport’s copper concentrate exports
to a halt and led to the company scaling back operations and
temporarily laying off thousands of workers in the impoverished
To comply with the new rules, Freeport and other miners are
required to convert their original contracts of work to a
special contract. Freeport, which argues this requirement and
others violate its existing contract, has threatened
But both sides have recently softened their tone, saying
instead that arbitration is a last resort.
"So long as we're progressing to (a) ... mutually acceptable
resolution, there would be no arbitration," Adkerson said.
Freeport was last month granted an export permit valid until
February 2018, allowing it to resume export shipments until at
least October 2017, pending further negotiations. The move came
after U.S. Vice President Mike Pence visited the Southeast Asian
A Freeport workers' union started a month-long strike on May
1 aimed at ending the company's layoffs and furlough policy.
(Reporting by Wilda Asmarini; Editing by Mark Potter)