Freeport-McMoRan Copper & Gold Inc. (FCX), the largest publicly traded copper producer, may have to declare force majeure for concentrate sales from its Grasberg mine in Indonesia because of new rules on mineral exports.
The company may also consider constraining operating costs, deferring capital spending and cutting workers, if it’s unable to resume normal operations over an extended period, Phoenix-based Freeport said in a filing yesterday. Freeport’s local unit still hadn’t received export permits by Feb. 24., Chief Executive Officer Richard Adkerson said that day in a presentation at a mining conference in Florida.
The new rules curb the shipping of unprocessed ore and place duties on exports of copper concentrate, a semi-processed raw material, as the country seeks to increase the value of the exports. Freeport says the new regulations conflict with its rights under an existing contract with the government.
Milling at Grasberg averaged about 112,000 metric tons a day since mid-January, about half the normal rate, the company said yesterday. Freeport sends about 40 percent to 50 percent of regular output from Grasberg to a smelter it co-owns in Indonesia.
Force majeure is a legal clause that allows companies to miss deliveries because of circumstances beyond their control.
To contact the reporter on this story: Liezel Hill in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: Simon Casey at email@example.com