Let's get tough on Indonesia, says Freeport

FREEPORT-McMoRan boss Richard Adkerson has told the BMO Capital Markets Global Metals & Mining Conference that shareholders are willing to see the company take a harder line against the Indonesian government.
Let's get tough on Indonesia, says Freeport Let's get tough on Indonesia, says Freeport Let's get tough on Indonesia, says Freeport Let's get tough on Indonesia, says Freeport Let's get tough on Indonesia, says Freeport

Richard Adkerson

It comes as the Grasberg copper mine remains without an export permit.
The Indonesian government wants Freeport to move from a contract of work (CoW) to a special mining business license (IUPK), and therefore forgo its current rights to fiscal and legal certainty, as well as committing to build a new smelter.
Adkerson told the Florida conference that the Grasberg situation was the biggest issue facing the company.
"Many say that over time, the company has been too nice and polite in dealing with the Indonesian government," he said.
"But we've tried to be as co-operative as we possibly could. Now we're in the position of standing up for our rights under the contract."
Adkerson said the company would not give up its CoW and likened the Indonesian government's actions as a form of expropriation.
"And we're resisting it aggressively. Our attorneys advise us that our rights under arbitration are very strong," he said.
Adkerson said the company was reluctant to resort to international arbitration, but major shareholders and partner Rio Tinto were supportive.
"We have no choice. Believe me, it's not what we want."
Adkerson said it wasn't a matter of one party winning over the other.
"We're all going to win together, or we're all going to lose together - and that's going to be the dynamic that brings us to the table," he said.
In the meantime, the Grasberg mill is suspended and PT Smelting is due to restart next month, that can take 40% of current production levels.
"We've already begun action to adjust our costs and operations based on a constrained level of production," Adkerson said.
That has already resulted in job losses. Production will be impacted at a rate of around 70 million pounds of copper and 70,000 ounces of gold for each month of delay in getting a permit.