Indonesia to allow mine contract extension earlier than 2 yrs out – by Wilda Asmarini (Reuters India – February 20, 2015)

JAKARTA – Feb 20 (Reuters) – Indonesia will start allowing miners to renew contracts earlier than two years before expiry, the mines minister said on Friday, a move that would favour Freeport-McMoran Inc and its expansion plans at one of the world’s largest copper mines.

Southeast Asia’s largest economy is currently in talks with miners over their plans to develop domestic smelting and processing facilities, and earlier this week indicated that it could also ease a planned 2017 export ban on copper and other mineral concentrates.

The government’s willingness to show more flexibility comes after U.S.-based Freeport pushed ahead with expansion plans at Indonesia’s sole copper smelter at Gresik and gave its support to a government-backed industrial zone in Papua.

“The government regulation for extension proposals that regulates a minimum of two years before a contract expires will be revised,” Sudirman Said, Indonesia’s energy and mineral resources minister, told reporters.

Said did not say how early mining companies would be able to propose extensions but noted that oil and gas concession holders can propose renewals up to 10 years before a contract expires.

Under the current rules, many major miners operating in Indonesia can only apply for a contract extension two years before a concession agreement is due to end.

Any new regulation on earlier contract extensions would be linked to a miner’s smelter plans, the minister said.

Freeport, which runs the Grasberg copper and gold mining complex, has for years been seeking contract certainty before investing the more than $15 billion needed to turn its Indonesia asset into the world’s biggest underground mine after 2016.

For the rest of this article, click here: