Although an agreement between Freeport-McMoRan and the government of Indonesia regarding the future of the Grasberg Mine has not yet been finalized, Freeport chief executive Richard Adkerson said on Oct. 24 that he was encouraged by talks.

Indonesia introduced new mining rules this year that will give the government greater control of the nation’s mineral resources by requiring miners to divest a 51 percent stake, relinquish arbitration rights and pay new taxes and royalties.

Reuters reported that Adkerson vowed to represent the interests of the companies share holders while also searching for a solution.
“But I can tell you that we are working positively and amicably with the representatives of the government,” Adkerson said on a conference call from Indonesia’s capital, Jakarta. “At the same time, we are going to be relentless in representing the interest of our shareholders.”

Arizona-based Freeport, the world’s second-biggest copper miner, said it wants to avoid arbitration to deal with a new Indonesian.

But with few clear advances since a framework agreement on Grasberg was announced in August, Freeport shares dropped 3.3 percent on Oct. 25 to $14.73, reversing initial gains on better-than-expected financial results.

Progress has stalled on the valuation, timing and structure of divestment, which also affects Freeport’s joint venture partner Rio Tinto. Rio has held talks with Indonesia about exiting the venture, according to media reports.

Freeport said its stake in the Indonesian operation would drop first to 49 percent and then to 29 percent under the divestment and joint venture plan.

“While our interest in the participation in Grasberg would be reduced, we would be receiving cash from that interest, which would reduce our exposure to Indonesia,” Adkerson said. “There’s positive and negatives to that.”

Freeport earlier reported a third-quarter profit of 34 cents a share and revenue of $4.3 billion, bettering analyst expectations of 31 cents and $4.08 billion, respectively.

Average realized copper prices rose to $2.94 per pound from $2.19.

Copper prices charged through a three-year high last week, underpinned by improving manufacturing profits in China, the world’s top user of metals.

Freeport maintained its 2017 sales forecast of 3.7 billion pounds of copper and 1.6 million ounces of gold, after twice lowering it this year.