January 22, 2015 / 10:10 PM / 5 years ago

Freeport picks site for new Indonesian copper plant as deadline looms

NEW YORK, Jan 22 (Reuters) - Freeport-McMoRan Inc said on Thursday it has picked Gresik, East Java, as the location for its planned new copper smelter in Indonesia, the latest move by the Arizona-based miner to comply with an export deal with the government last year.

In a statement, the company’s Indonesian subsidiary PT Freeport Indonesia said it chose Gresik due to the availability of infrastructure and as a result of a cooperation deal with state-owned fertilizer firm Petrokimia Gresik.

Details of the agreement with Petrokimia were not given.

The move comes after the country’s mining minister warned on Tuesday the company could lose its permit to export copper concentrate from its massive mine in West Papua unless it could show progress in developing a new smelter this week.

According to an agreement signed with the government in July last year, the country’s largest copper producer has agreed to pay a $115 million “assurance bond” to develop the smelter by 2017.

As part of the terms, it must complete the land acquisition for the 300,000-tonne capacity smelter by Sunday.

The company has also pledged to invest more than $15 billion to turn its Grasberg complex into an underground mine after 2016. (Reporting by Susan Taylor in Toronto; writing by Josephine Mason in New York; Editing by David Gregorio)

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