Freeport-McMoRan eyes future of Grasberg Mine

June 9, 2017

Freeport-McMoRan said it is “on a path” to resume operations fully at its Grasberg Mine in Indonesia.

Copper concentrate exports from the mine restarted in April after a 15-week outage related to a government dispute over mining rights cut production by two-thirds from the second largest copper mine in the world, Reuters reported.

Freeport, whose current contract runs until 2021 with two 10-year extensions, will only agree to a license accompanied by an investment stability agreement that replicates current legal and fiscal certainty, Quirk said.

“We think we’re on a path to be able to get that resolved during this year and that’s our top priority,” Quirk said.

Without the agreement, Freeport is unlikely to continue investing in the country, she said, noting the company has already spent $3 billion on a project to transitions Grasberg to underground from openpit mining.

Production from the project, about half complete, is targeted for 2018 or 2019, she said.

The government will meet Freeport in mid June for further talks and negotiations could be concluded by October 2017, Teguh Pamuji, secretary general at Indonesia’s energy and mining ministry told reporters.

Meantime, Freeport is grappling with labor problems.

Its contractor-dominated workforce in Indonesia has been reduced to approximately 26,000 workers currently from about 33,000 at the start of 2017.

Following the export restrictions, Freeport furloughed some 3,000 workers in the first quarter, Quirk said, sparking a strike and high levels of absenteeism. Freeport later deemed that approximately 3,000 full-time employees and 1,000 contractors had resigned, Quirk said.

Quirk said Freeport is training additional workers and “offering opportunities for those workers that are deemed to have resigned to be able to apply for open positions through contractor companies.”

While the union said its strike would extend into June, Freeport has not seen additional absenteeism that would cause it to assume the workers had resigned, she added.

The union, which began a 30-day strike on May 1, said on May 20 that it would extend the strike for a second month.



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