Indonesia Approves Permit for Freeport to Ship ConcentratesEko Listiyorini and Yoga Rusmana
Freeport receives license to export 1 million metric tons
Copper dropped most in a month Tuesday as supply to resume
Indonesia approved the renewal of an export license for Freeport-McMoRan Inc. that will allow the company to ship concentrates from its Grasberg copper and gold mine.
Karyanto Suprih, acting director-general for foreign trade at the trade ministry, said in a text message Wednesday that he has signed the permit. The license will allow Freeport to ship 1 million metric tons of concentrates through Aug. 8, according to Didi Sumedi, export director for mining and industry products at the ministry. The previous permit expired on Jan. 28.
While the renewal of the license may add pressure to prices, it will support the Phoenix-based producer as it struggles with a 20 percent slump in copper in the past year and after Moody’s Investors Service cut its credit rating four levels to junk last month.
Copper for three months delivery fell 0.6 percent to $4,480 a ton on the London Metal Exchange by 4:14 p.m. in Singapore. Prices fell as much as 3.1 percent on Tuesday, the biggest drop in a month.
The Grasberg mine in Papua is the world’s largest in terms of copper capacity after Escondida, according to the International Copper Study Group. The company says it has the single biggest gold reserves.
The company has agreed to pay a 5 percent tax on exports of concentrates, Bambang Gatot Ariyono, director-general of coal and minerals at the Energy and Mineral Resources Ministry, said on Tuesday. The government and Freeport are still discussing a $530 million payment toward a new smelter, he said.
Freeport, which mined $1.7 billion of copper and $1.4 billion of gold in 2015 from Grasberg, also wants to extend its contract to operate in Indonesia. That expires in 2021, and the company has agreed to sell shares as part of the negotiation. An Indonesian official said last month that Freeport had offered the government an 11 percent stake in its local unit for $1.7 billion. Freeport has confirmed an offer was made though it didn’t give details.