JAKARTA, July 2 (Reuters) - Freeport-McMoRan Copper & Gold Inc is still in talks with Indonesia over a six-month dispute that has halted copper exports, and has no plan yet to follow Newmont Mining Corp in seeking international arbitration.
Freeport confirmed its chief executive Richard Adkerson is still in Jakarta, as the two sides try to broker a deal to restart shipments of copper concentrate from Freeport’s Grasberg complex, one of the world’s biggest copper mines.
Newmont, which declared force majeure last month at its Batu Hijau copper mine, said on Tuesday it had filed for international arbitration against the government, citing export curbs that include an escalating export tax.
“We have no such plan yet,” Rozik Soetjipto, Freeport Indonesia CEO, told Reuters in a text on Wednesday. Asked about talks with the government, he said: “Still ongoing.”
Global copper prices, currently not far off four-month highs, have been underpinned by the disruption to supplies from Indonesia.
Freeport and Newmont, which account for 97 percent of Indonesia’s copper production, halted concentrate exports in January when the government introduced new mining rules, including an export tax, in an effort to force miners to build smelters and processing plants in Indonesia.
The miners argue that their current contracts mean they should be exempt from the tax.
An attempt to solve the issue and restart copper concentrate exports was spearheaded by Indonesia’s new chief economics minister and billionaire businessma Chairul Tanjung last month.
Tanjung said on Wednesday he was disappointed by Newmont’s arbitration action.
“This makes us wonder whether Newmont has a good will to deal with Indonesian government,” he said. “We expect Newmont to sit back down with us so we can finish negotiations together.”
Swelling mine supply had been expected to tip the copper market into a surplus this year for the first time in several years, keeping a lid on prices and boosting the processing fees that miners pay smelters to refine metal.
But the protracted standoff over exports has wiped out the expected surplus and supported prices. Copper prices traded near around $6,987 per tonne on Wednesday.
“We’ll see around 400,000 tonnes of copper in concentrate removed from the market this year. We are now expecting a relatively balanced market,” said analyst Matt Fusarelli at AME Group in Sydney.
“Any further reductions would probably tip the market into deficit this year.”
At least one large Chinese copper smelter had agreed to pay lower processing fees with global miner BHP Billiton <BHP.AX BLT> for term concentrate shipments in the second half of 2014, from January to June shipments, two sources said last month. (Reporting by Michael Taylor and Yayat Supriatna. Additional reporting by Melanie Burton in SYDNEY; Editing by Richard Pullin)