(Adds CEO comments, details of dispute, shareholder
By Nicole Mordant
HOLLYWOOD, Fla. Feb 27 Shareholders are
pressuring miner Freeport-McMoRan Inc to stand up to the
Indonesian government over changes the Southeast Asian country
wants to make in the U.S. miner's contract, Freeport's chief
executive officer said on Monday.
Rio Tinto Plc, which is a partner in Freeport's
massive Grasberg copper and gold mine in Indonesia, is also
supportive of Freeport's tougher approach toward Jakarta, CEO
Richard Adkerson said.
In some of his strongest language yet on the issue, Adkerson
said the new regulations sought by Indonesia were "in effect a
form of expropriation of our assets and we are resisting it
"Many of our shareholders feel that we have been too nice.
Now we are in the position of standing up for our rights under
the contract," Adkerson told a mining conference of
institutional investors in Hollywood, Florida.
He said Freeport had held talks with large shareholders but
did not name them. Freeport's third-biggest shareholder is
activist investor Carl Icahn, who holds around 7 percent of its
shares. Icahn has been appointed a special adviser to U.S.
President Donald Trump.
Freeport, the world's biggest publicly listed copper
producer, warned last week it could take the Indonesian
government to arbitration and seek damages over a contractual
dispute that has halted operations and exports at Grasberg, the
world's second-biggest copper mine.
The dispute, which centers around the sanctity of Freeport's
30-year mining contract, comes as the Indonesian government
seeks to squeeze more revenue out of the mining industry by
shaking up regulations over foreign ownership and ore
The two sides have 120 days to settle their differences
before heading to arbitration. "The polite approach that we have
had in the past, if we go to arbitration, is going to be
replaced with tough lawyers," Adkerson said.
He added that he hoped the dispute could be resolved
cooperatively although the Indonesian government has so far
"responded aggressively through ministers."
Freeport's inability to export copper since mid-January,
coupled with a strike at BHP Billiton's
Escondida in Chile, the world's biggest copper
mine, has pushed copper prices to 20-month highs of
$6,204 a tonne on the London Metal Exchange this month.
In the face of the export halt, Freeport last week said it
was proceeding with its plan to reduce production at Grasberg by
about 60 percent, make significant cuts to its workforce and
suspend investments in the province of Papua.
(Editing by Jeffrey Benkoe and Matthew Lewis)