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Freeport CEO heads to Jakarta as export stoppage entering 6th month

JAKARTA, May 30 (Reuters) - Freeport-McMoRan Copper & Gold Inc's CEO will be in Indonesia next week for talks to resolve the U.S. miner's impasse with the government over exports from its giant Grasberg copper and gold mine that have halted since January.

A Freeport spokeswoman declined to provide details on Chief Executive Richard Adkerson's visit.

Indonesia levied in January an escalating tax on copper concentrate exports as part of efforts to force miners to build smelters and processing industries in Southeast Asia's largest economy to move up the value chain.

However, Arizona-based Freeport and Colorado-based Newmont Mining Corp, accounting for 97 percent of the country's copper output, say the rules conflict with their mining contracts that exempt them from new taxes and duties.

Newly appointed chief economic minister Chairul Tanjung said on Wednesday the issues would be resolved next week with the Freeport management in Jakarta and that exports could restart soon.

The government says its minerals policies are a success, with a spike in nickel prices and 66 smelter projects in the pipeline.

The controversial mineral policy and halt to mineral exports have political ramifications for the next leaders of Southeast Asia's largest economy as it approaches elections in July.

Disputes and confusion over the rules have halted about $500 million worth of monthly mineral ore and concentrate exports, causing concerns it is widening the country's already large current account deficit.

Earlier, Freeport said production at the world's fifth-largest copper mine had been slashed by around 60 percent and that a force majeure could be announced if the dispute drags on.

Rapidly reaching its stockpile capacity, Newmont warned earlier this month it may start ramping down production and laying off workers from its Batu Hijau mine from June.

Newmont's spokesman in Jakarta declined on Friday to comment on whether this would go ahead as planned.

Freeport and Newmont are currently in talks with Indonesia's state-owned PT Aneka Tambang (Antam) to build a $2.2 billion copper smelter, but plans for the project are yet to be finalized.

Both Freeport and Newmont had agreed to pay deposits worth a total of $140 million to the government to guarantee their commitment to the smelter, Coal and Minerals Director General Sukhyar said this week.

The government has set new 2014 copper concentrate export volumes of 600,000 tonnes for Freeport and 250,000 tonnes for Newmont, worth around $1.5 billion, Sukhyar said, roughly half the government's previous target.

(Editing by Jonathan Thatcher and Muralikumar Anantharaman)