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JAKARTA, Jan 30 (Reuters) - Indonesia may issue a temporary mining permit “in one or two days” to the local unit of Freeport McMoRan Inc, the mining minister said, potentially enabling Freeport to resume exports of copper concentrate from its Grasberg mine in Papua.
Indonesia halted Freeport’s exports of concentrate on Jan. 12, a stoppage Freeport said would reduce Grasberg’s copper output by around 70 million pounds per month.
New rules issued that day require Freeport to obtain new mining rights before being allowed to resume exports, as part of Indonesia’s push to add value to its minerals and develop domestic industries.
Shares of the world’s biggest publicly-listed copper miner tumbled more than 7 percent on Wednesday after it warned it would need to start slashing output and jobs at its Indonesia mine by mid-February if it failed to get a new export permit.
Energy and Mineral Resources Minister Ignasius Jonan said late on Monday that the government is now processing a proposal from Freeport, and may issue a temporary special mining permit for up to 6 months that will allow the company to resume copper exports.
“If they satisfy the requirements, including the requirements to build a smelter, we will issue them with a temporary special mining permit and an export (permit) too,” Jonan said.
The temporary permit is being considered to avoid a stoppage to Freeport’s exports while it completes the requirements for a new special mining permit, he added.
Without this, Freeport’s (exports) “could stop for 3 months or 6 months, (and) that’s also unfair,” Jonan said.
If they don’t complete the requirements for a full permit within the timeframe given, the government will revoke their permit, he said.
A spokesman for Freeport Indonesia could not be reached for comment on the matter. Previously the company has said it is seeking “a stability agreement providing the same rights and the same level of legal and fiscal certainty provided under its contract of work.”
Freeport also said it been given “indications” by the government that it will be allowed to resume copper concentrate exports while it negotiates converting its contract, and expects exports from its Indonesian unit to resume “soon”. (Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing by Louise Heavens/Ruth Pitchford)
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