Freeport Indonesia CEO resigns after force majeure on copper exports

Freeport Indonesia CEO resigns after force majeure on copper exports
Freeport Indonesia CEO resigns after force majeure on copper exports

Freeport was the second big copper producer in a week to declare force majeure, after BHP Billiton did so on Feb. 10 for Escondida in Chile, where a strike had grounded the world's largest mine.

Grasberg was expected to produce 800,000 tonnes of copper in 2017, about 3.5 percent of global supply, said Jefferies analyst Chris LaFemina. Coupled with Escondida, the mines represent some 10 percent of global supply, he said.

Under new mining rules that Indonesia introduced in January, Freeport had to switch from the contract of work it had operated under since 1967 to a special mining permit before applying for export permits.

The new permit requires Freeport to pay taxes and royalties it was previously exempt from and divest up to 51 percent of its Indonesian unit, an increase from a previously set 30 percent.

To date, it has divested 9.36 percent.

Indonesia's Mining Minister Ignasius Jonan on Saturday said Freeport had refused the government's offer of a six-month transition period in which the company can negotiate terms for its new mining permit.

Freeport could begin exporting again if it agreed to the transition period, Jonan said.

CNBC

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