| JAKARTA, June 17
JAKARTA, June 17 Indonesia and U.S. miner
Freeport-McMoRan Copper & Gold Inc have agreed on the
basic framework for contract renegotiations for the world's
fifth-largest copper mine, a further step in efforts to resume
Indonesia's biggest copper producer and fellow miner Newmont
Mining Corp halted copper concentrate shipments in
January when the government introduced new mining rules,
including an escalating export tax that the two firms say
violates their mining contracts.
The CEOs of both firms met with chief economic minister
Chairul Tanjung in Jakarta last week in a bid to resolve the
"There was a lot of progress and we have moved forward in
the renegotiation process, but there are still some processes
left," Rozik Soetjipto, Freeport Indonesia CEO, told Reuters on
The export tax is part of a government drive to force miners
to build smelters and processing plants in Indonesia, but a lack
of progress in ending the dispute has led Newmont to declare
force majeure and Freeport to slash output.
President Susilo Bambang Yudhoyono's administration has said
it will ease the tax for miners that build smelters, but
Freeport is reluctant to commit to the billion-dollar plus price
tax without assurances it will get a contract extension for its
Grasberg complex after 2021.
The government can only renew Freeport's contract in 2019 at
the earliest, but hopes to resolve the issue by instead drawing
up a Memorandum of Understanding (MoU) with Freeport.
"In the meeting with Chairul Tanjung, we agreed to the
principal points (of the MoU)," Soetjipto said. "The MoU will
contain details of the basic points that will become the
agreement for (the new contract)."
The government said it was finalizing the MoU agreement, but
has yet to receive a recommendation on the legal working of the
document from the attorney general's office. It was also waiting
for further information on the export tax from the finance
ministry, said Coal and Minerals Director General Sukhyar.
Tanjung said last week he hoped for a conclusion on the
contract talks by the end of the month.
(Additional reporting by Wilda Asmarini; Writing by Randy Fabi;
Editing by Richard Pullin)