| JAKARTA, July 7
JAKARTA, July 7 Freeport-McMoRan Copper & Gold
Inc have agreed a Memorandum of Understanding (MoU) with
the Indonesian government on contract renegotiations, ministry
officials said on Monday, as both sides look to end a six-month
dispute that has halted concentrate exports.
Indonesia's biggest copper producer has been involved in
lengthy government-led talks aimed at resolving a spat over an
escalating export tax and contract renegotiations, after the
country introduced new export rules on Jan. 12.
The export tax is part of a government drive to force miners
to build smelters and processing plants in Indonesia, while
Freeport is seeking assurances it will get a contract extension
for its huge Grasberg copper and gold complex beyond 2021.
"We are happy and expect it will be finalised with an MoU
signing," said chief economic minister Chairul Tanjung,
referring to the contract renegotiations.
Billionaire businessman Tanjung has spearheaded a new
government drive to resolve both the export and contract issues.
The draft MoU still needed to be approved by both the
cabinet and outgoing President Susilo Bambang Yudhoyono, said
Deputy Energy and Mineral Resources Minister Susilo Siswoutomo.
If the draft MoU is approved by the president, although it
will be a further step towards resuming copper concentrate
exports, there is no indication that it will satisfy the
Freeport Indonesia could not be reached for comment on
Monday, and government officials were unable to give a date for
when the cabinet would next meet.
Government officials have previously said Freeport can only
renew their 2021 deal in 2019 at the earliest, but it now seems
likely that the miner will be offered a different type of
contract when its current deal ends.
There was renewed hope that the export spat would be
resolved last month after the government finalised a new export
tax draft regulation, but with a presidential election this
week, progress appears to have stalled.
In addition to a contract extension, the renegotiations,
which began more than a year ago, include changes to Freeport's
mining and exploration area, divestment, royalty payments and
plans to build a domestic smelter.
Freeport, along with fellow copper miner Newmont Mining Corp
, halted copper concentrate exports in January when the
government introduced the surprise tax, which the two U.S. firms
say violates their mining contracts.
(Additional reporting by Michael Taylor; Reporting by Wilda
Asmarini; writing by Michael Taylor; Editing by Jason Neely)