Freeport says Indonesia approval for exports has not been granted
Freeport-McMoRan reported that its subsidiary, PT Freeport Indonesia, continues to seek approval from Indonesian authorities for the export of its copper concentrates, consistent with its rights under its Contract of Work. To date, this approval has not been granted. Richard Adkerson, FCX President and CEO, and Chappy Hakim, PT-FI President Director, said: "We have been actively engaged with Indonesian governmental authorities to enable full operations at PT-FI to continue without disruption. This would be in the best interests of all stakeholders, including the Government of Indonesia, our large work force, the local community, local suppliers and Freeport's shareholders. We are disappointed that this matter remains unresolved and are concerned about the negative impacts for all stakeholders, especially for our workforce and the local economy. We encourage the Government to enable our full operations to continue without disruption and to provide the required assurances to support our long-term investment programs so these negative impacts can be avoided." The company added, "To date, the Government has not granted continuation of exports. The Government has indicated that in order to export its concentrate production, PT-FI would be required to immediately convert to an IUPK, forgo its current rights to fiscal and legal certainty and commit to a new smelter prior to completing a long-term investment stability agreement. PT-FI has advised the Government that it cannot accept these conditions unless a mutually satisfactory replacement agreement is completed. A continuing delay in obtaining rights to export its copper concentrates will require PT-FI to undertake near-term actions to reduce production to match available domestic capacity at PT Smelting, which processes approximately 40 percent of PT-FI's concentrate production. Under the reduced operating plans, PT-FI will be required to significantly adjust its cost structure, reduce its work force and spending with local suppliers, and suspend investments on its underground development projects and new smelter. For each month of delay in obtaining approval to export, PT-FI's share of production is projected to be reduced by approximately 70 million pounds of copper and 70 thousand ounces of gold."