A temporary mining licence has been issued by the Indonesian government to Freeport-McMoRan’s local unit allowing it to resume concentrate exports from the Grasberg Copper Project in Papua Province, according to Bloomberg. The resumption follows a period of about 12 weeks during which exports ceased and production halted.
Energy and Mineral Resources Ministry secretary-general Teguh Pamudji told reporters that the permit would be valid for eight months from the time that the producer was first offered a special mining licence or IUPK in February.
He also said that the government would continue talks with Freeport on a long-term financial stability pact.
Following the government’s statement, a Freeport spokesman that talks to resume exports were continuing. “We are progressing constructive discussions with the government that would enable PT FI (Freeport Indonesia) to resume concentrate exports while retaining our contract until a mutually satisfactory replacement agreement is completed.”
Freeport and the government have been entangled in a drawn out dispute over the company’s contract, including a requirement to divest a majority stake to domestic shareholders and the ability to export. The company has vowed to hold out for investment safeguards before agreeing to a conversion of its Contract of Work into a long-term IUPK.
PT FI spokesman Riza Pratama said that the company expected to resume exports soon and would continue discussions with the government on other issues.
Teguh Pamudji said Freeport would be able to switch back to its Contract of Work from the temporary mining licence if a long-term deal was not reached by October 10, but its right to export would be rescinded.
“We have agreed with Freeport to sit down and discuss the short-term and long-term approach,” he said. “For the short-term, the continuity is important as Freeport Indonesia has a large impact on Papua, so last week we agreed to release a temporary licence.
“With that, Freeport can export concentrates and pay duties. There’s also an agreement to start talks next week on the long-term approach.”
Freeport can restart exports based on a recommendation in February which allowed it to ship 1.1 million tonnes of concentrates over 12 months, Energy and Mineral Resources Ministry director-general of coal and minerals Bambang Gatot Ariyono said on Tuesday.
The interim deal could allow Freeport to restore operations at Grasberg to full capacity. The miner currently operates the mine at about 40% to feed a smelter in Gresik on Java island.