More Permit Snag for Freeport Indonesia as Smelter Construction Stuck on Planning Stage

The Indonesian government still has not issued a new copper concentrate export permit for Freeport Indonesia — the largest gold and copper miner in the country, putting the company's next overseas shipment in a lot of doubt. (Reuters Photo/Muhammad Yamin)

By : Rangga Prakoso | on 5:12 PM February 18, 2018
Category : Business, Commodities

Jakarta. The Indonesian government still has not issued a new copper concentrate export permit for Freeport Indonesia — the largest gold and copper miner in the country, putting the company's next overseas shipment in a lot of doubt.

Freeport's last export permit expired on Friday (16/02). Indonesia's Energy and Mineral Resources Ministry will evaluate progress in the company's plan to build a local smelter before issuing a new one.

"We're still waiting for news from the ministry. Hopefully [we'll hear it] soon," Freeport Indonesia spokesman Riza Pratama said on Sunday.

Riza said Freeport still does not know if its next copper concentrate delivery to overseas clients will be delayed or not.

Freeport Indonesia — the local unit of US mining giant Freeport McMoran — needs to have completed 90 percent of the agenda on its annual smelter construction plan to be issued a new export permit.

Riza said according to an independent audit by Surveyor Indonesia, that target has already been reached.

Freeport has been preparing the construction of a smelter in Gresik, East Java, since 2014. The facility will be able to process 2 million tons of concentrate per year once it is fully operational.

But as of now, the project still has not reached construction stage.

Currently, Freeport Indonesia is involved in tough negotiations with the government to attain a special mining business license (IUPK) to replace its original work contract that will expire in 2021.

The miner has been arguing it needs be assured the Indonesian government will allow it to operate in the country beyond 2021 before it can commit to large-scale investments like building a smelter from scratch.

 

 

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