| JAKARTA, June 12
JAKARTA, June 12 The head of Freeport McMoRan
Copper & Gold Inc has returned to Indonesia's capital,
marking what might be a last-ditch effort to resolve a dispute
over a mineral export tax before a new administration takes over
The U.S. miner's chief executive, Richard Adkerson, is in
Jakarta again less than a week after talks with Indonesia's new
chief economics minister failed to make a major breakthrough on
an escalating export tax that has halted copper concentrate
shipments since January.
"Yes he is," Freeport spokeswoman Daisy Primayant said in a
text message on Thursday, when asked whether Adkerson was back
in Jakarta. She did not elaborate.
Indonesia's chief economics minister and billionaire
businessman, Chairul Tanjung, is spearheading a new government
push aimed at brokering a deal with foreign miners to restart
copper concentrate exports that were halted five months ago.
Both Freeport and fellow copper miner Newmont Mining
have previously argued that they should be exempt from the tax,
which kicks in at 25 percent and rises to 60 percent in the
second half of 2016, before a total concentrate export ban in
2017. They say their current contracts prohibit any extra taxes.
The export tax is part of a government drive to force miners
to build smelters and processing plants in Southeast Asia's
largest economy, but a lack of progress in resolving the
stalemate last week led to Newmont declaring force majeure.
Although government officials have said Freeport has agreed
to pay the tax, with the percentage tied to progress made in
smelter construction, the extension of the Arizona-based miner's
contract beyond 2021 appears to now be a stumbling block.
While Freeport says it needs the certainty of a contract
extension before investing more than $15 billion to turn its
Grasberg complex into an underground mine when open-pit
activities end after 2016, the out-going government says it
cannot legally do this.
Government officials have previously said that Freeport can
only renew their 2021 deal in 2019 at the earliest.
"The government at the moment has no right to extend
Freeport's contract that ends in 2021," Tanjung told reporters
on Thursday. "Freeport has asked for that extension but ... the
current government doesn't have the right."
The government has consulted legal experts to see whether
there is room for maneuvre on the 2019 contract stipulation, and
has proposed signing a legally binding MoU with Freeport to
bypass the contract extension issue.
Indonesia holds a presidential election on July 9, with a
new administration set to take office in October. Current
President Susilo Bambang Yudhoyono has served the maximum two
The new export rules have halted about $500 million worth of
monthly mineral ore and concentrate exports, and have hampered
first-quarter economic growth, which grew at its slowest in more
than four years.
(Additional reporting by Wilda Asmarini, Editing by Jonathan
Thatcher and Ed Davies)