GO
Loading...

UPDATE 1-Freeport to resume Indonesia copper exports in "near future"-minister

Yayat Supriatna
Monday, 24 Feb 2014 | 3:14 AM ET

future"-minister@

* Indonesia will consider easing export tax after Freeport builds smelter-minister

* Feasibility study on Freeport-Antam copper smelter to be completed in April

JAKARTA, Feb 24 (Reuters) - U.S. miner Freeport-McMoRan Copper & Gold is expected to resume copper concentrate exports from Indonesia in the "near future", a minister said, after halting shipments due to a dispute over new mining rules imposed last month.

Freeport and Newmont Mining Corp, which together produce virtually all of Indonesia's copper, are locked in talks with the government over an export tax that the companies say breach their contracts.

The comments from Indonesian Industry Minister M.S. Hidayat are the first indication the two sides are close to a resolution.

"Freeport, in principle, understands the regulations and will obey it," Hidayat told reporters on Monday after meeting with Freeport Indonesia CEO Rozik Sutjipto.

"Freeport will also export concentrate in the near future. On the export tax relaxation, the finance minister will consider it after Freeport builds a smelter."

Freeport was not immediately reachable for comment on the expected resumption of its exports. Hidayat did not mention Newmont in his comments.

President Susilo Bambang Yudhoyono on Jan. 12 imposed the controversial mining law, which included the disputed tax and a ban on mineral ore exports, to force miners to process raw materials in Indonesia.

But confusion and disputes over the new rules have halted $500 million worth of monthly mineral ore and concentrate exports. The problems have also disrupted plans to invest $4 billion in copper smelters.

Before the ban, Indonesia was the world's biggest exporter of nickel ore. It is also a major supplier of refined tin, thermal coal and copper.

Hidayat said Freeport was seeking permission to resume concentrate exports while it works to build a smelter within three years.

Freeport's Sutjipto confirmed to reporters on Monday that the company would build a copper smelter in Indonesia.

Earlier this month, Freeport and state-owned PT Aneka Tambang (Antam) agreed to study the possibility of building a $2.2 billion, 300,000-tonne-capacity smelter to process copper.

Sutjipto said the feasibility study on the smelter with Antam will be completed in April.