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Indonesia hands Freeport temporary permit as mine negotiations continue
April 4, 2017 / 11:52 AM / 8 months ago

Indonesia hands Freeport temporary permit as mine negotiations continue

JAKARTA, April 4 (Reuters) - Indonesia has issued Freeport McMoRan Inc’s local unit with a temporary “special mining permit” allowing the miner to apply for a resumption of copper concentrate exports while the two sides negotiate longer-term mining rights.

Mining Ministry Secretary-General Teguh Pamuji said on Tuesday that Freeport could resume exports while discussions with the government continue on investment stability, divestment and domestic smelting, among other areas.

With the issuance of the permit, “Freeport can export concentrate and pay an export duty,” Pamuji told reporters. The permit is backdated to Feb. 10 and will be valid until Oct. 10.

Indonesia stopped miners from exporting copper concentrate on Jan. 12 under rules that requiring Freeport to adopt a new license that includes new taxes and royalties before being allowed to resume shipments from its Grasberg mine, the world’s second-biggest copper mine.

Freeport, the world’s biggest publicly listed copper producer, has insisted that any new permit must have the same fiscal and legal guarantees as those in its 30-year mining contract, and warned in February if the matter was not resolved by June 17 it could go to arbitration and seek damages.

Pamuji also said that, along with the temporary permit, Indonesia will continue to respect Freeport’s existing 30-year mining rights, or Contract of Work, under a new approach to address the long-term and short-term issues around Grasberg.

An earlier recommendation for Freeport to export up to 1.1 million tonnes of concentrate until Feb 2018 would still apply, but the company still needs an export permit from the Trade Ministry, said Director General of Coal and Minerals Bambang Gatot at the briefing with Pamuji.

Oke Nurwan, the director general of foreign trade at the Trade Ministry said his office had not received an application for exports from Freeport yet.

A spokesman for Freeport Indonesia did not respond to requests for comment.

The issuance of the temporary permit comes amid efforts by both sides to relieve the impasse.

Energy and Mineral Resources Minister Ignasius Jonan said on March 30 that the two sides were “in the final stage of discussions” on a deal that would allow exports for the next six months while a final permit is negotiated.

Jonan added at the time that if Freeport agreed to a special permit exports could resume.

Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing by Christian Schmollinger

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