Freeport-McMoRan reported in October that its Indonesian subsidiary, PT Freeport Indonesia (PT-FI), has received assurances from the government that approval will be granted for extension of mining operations at the Grasberg complex in Papua province beyond 2021, including the same rights and level of legal and fiscal certainty provided under its current Contract of Work.
The government is currently developing economic stimulus measures that include revisions to mining regulations to promote economic and employment growth. The current assurances to Freeport-McMoRan provide certainty that the new regulations will not negatively impact PT-FI operations.
PT-FI is owned 90.64% by Freeport-McMoRan and 9.36% by the government. The Grasberg complex is located in remote highlands in Papua province on the western half of the island of New Guinea. The complex is one of the world’s largest copper-gold mining operations, with current production from an open pit and two underground mines. Production during the first half of 2016 totaled 359 million lb of copper and 615,000 oz of gold in concentrates.
PT-FI has several projects in progress in the Grasberg district targeting development of large-scale, long-lived, high-grade underground orebodies located beneath and near the Grasberg open pit. These orebodies are expected to ramp up over several years to process approximately 240,000 mt/d of ore in aggregate, following transition from open-pit mining, currently anticipated to occur in late 2017.
Regarding the government’s expression of support, Freeport-McMoRan Chairman James R. Moffett said, “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.”
Sudirman Said, Indonesia’s minister of energy and mineral resources, said, “We welcome the continuation of Freeport’s investments in Papua, which will provide increasing benefits to the national and local economies.”