Freeport Reaches Deal With Indonesia, Set to Resume Copper Exports

Reuters reported Friday that Freeport-McMoRan Inc. (NYSE:FCX) signed a deal with the Indonesian government to resume exporting copper concentrates from the country. Freeport, along with other miners such as Newmont Mining Corp. (NYSE:NEM), has seen concentrate shipments halted for over six months due to the implementation of strict export regulations in January.

To secure the deal, Freeport agreed to higher royalties, and will pay a bond as a guarantee that it will eventually build a copper smelter. In return, Indonesia will reduce the copper concentrate export tax down to just 7.5 percent for Freeport from the original 25 percent (which was set to hit 60 percent by 2017) and will eliminate the tax once Freeport invests 30 percent of funds needed to build a domestic smelter.

Encouraged by the news, Newmont, which had previously filed for international arbitration over the export rules, is now in talks with the Indonesian government as well.

Freeport is now planning on exporting 756,000 tonnes of copper concentrate in the second half of this year. The company’s shares jumped 1.79 percent on the news.

As quoted in the publication:

With its export permit in the bag, Indonesia’s top copper miner said it will resume full operations immediately, with concentrate shipments expected to resume next month from Grasberg, one of the world’s largest copper mines.

Freeport Indonesia CEO, Rozik Soetjipto, said:

In terms of permitting, everything is OK. We still have to load the ship, and this may take a few days.

Click here to read the full Reuters article.