JAKARTA – Feb 16 (Reuters) – Indonesia has dropped its demand that Freeport-McMoran Inc build a $1.5 billion copper smelter in Papua province, saying a regionally owned enterprise would take on the project instead, website Detik.com reported, quoting the mining minister.
The ministry in December said Arizona-based Freeport, which runs the world’s fifth-largest copper mine in Indonesia, should agree to build the Papua smelter in five years if it wanted a mining contract extension beyond 2021.
The latest decision could ease pressure on Freeport, which has already agreed to a $2.3-billion expansion by 2017 of its copper smelting facility in East Java, currently the only one in the country.
The government has been pushing the company to comply with rules that force miners to process and refine minerals domestically.
“If Freeport is burdened in two locations it would be uneconomical,” Energy and Mineral Resources Minister Sudirman Said said on Sunday, according to the Detik website.
A regionally owned enterprise would build the Papua smelter and could team up with other investors on the project, the ministry said in a document obtained by Reuters.
An investor from China has already approached the Papua administration, Detik’s report cited Said as saying, without providing details.
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