Its existing mining contract is set to end in 2021 and present rules only allows talks on an extension two years before a contract is due to end.
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Indonesia’s Minister of Energy and Mineral Resources said in a letter to Freeport that the government would not “unreasonably withhold or delay approval” the contract extension.
“We are pleased with the assurances from the government of Indonesia of legal and fiscal certainty and look forward to continuing our long-term partnership and investment plans to advance the economy, jobs and economic velocity in Papua”, said James R. Moffett, chairman, Freeport-McMoRan.
Reuters reports a mines ministry official, Bambang Gatot, saying a revision to the government’s regulations is being processed by the economics ministry, and should be released by the end of the year.
Freeport has been in negotiations with Indonesia for years over extending the contract at the mine which it plans to transition from a pit mining operation to an underground one in late 2017.
His government has been rolling out new measures to re-energise Indonesia after growth cooled in the second quarter to 4.67 per cent, the slowest pace in six years.
Yet President Joko Widodo has shown signs that the government is trying to mend fences with wary investors.
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The promise of an extension reflects Freeport’s previous agreement to higher royalties, domestic processing and divestment, the company said in a statement. The company now produces about 220,000 tons of copper ore per day, which is then converted to copper concentrate.
