Freeport McMoRan: No Impact From New Indonesia Mine Rules
07 März 2012 - 11:52PM
Dow Jones News
Freeport McMoRan Copper & Gold Inc. (FCX) said its contract
with the Indonesian government will protect the company's ownership
of its Grasberg copper operations from new rules requiring foreign
investors to reduce direct stakes in mines.
Indonesia will require foreign investors to gradually reduce
their stakes in mineral and coal mines until they reach a maximum
49% ownership, from previous limits of 80%, the Energy and Mineral
Resources Ministry said Wednesday.
The rule change will affect new contracts or the renewal of
existing contracts, a senior Indonesian official told Dow Jones
Newswires.
Freeport McMoRan, the world's largest listed copper producer,
signed an agreement, known as a contract of work, with Indonesia in
1991 for 30 years with two 10-year extensions.
"Our Contract of Work does not require Freeport-McMoRan to
divest any portion of its ownership in PT Freeport Indonesia or PT
Indocopper Investama," Freeport McMoRan spokesman Eric Kinneberg
told Dow Jones Newswires in an email.
Freeport McMoRan owns 90.64% of PT Freeport Indonesia, including
9.36% owned through its wholly owned subsidiary, PT Indocopper
Investama. The government of Indonesia owns the remaining 9.36% of
PT Freeport Indonesia.
The parent company has previously said that any changes to the
contract of work would require mutual agreement between Freeport
McMoRan and the government of Indonesia. Freeport McMoRan also said
it has agreed to voluntarily divest at fair market value a 9.36%
stake and is in discussions with potential acquirers, including the
Province of Papua.
The company also confirmed previously announced plans to restart
work at Grasberg on March 12. Operations at the world's
third-largest open-pit copper mine were interrupted by a labor
strike last year, and Freeport McMoRan said its 2012 forecast gold
and copper sales remain under review and will be updated to reflect
the disruptions.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095;
tatyana.shumsky@dowjones.com
--Deden Sudrajat in Jakarta contributed to this article.
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