World’s second-largest copper mine under threat after bust-up with Indonesia
Richard Adkerson, chief executive of Freeport-McMoRan, has six months to thrash out a deal with Indonesia to assure the future of Grasberg, the world’s second-biggest copper deposit.
The main open pit at Grasberg sits more than 4,000 metres above sea level among snow capped mountains in a remote and restless part of Indonesia. Continually shrouded in fog and soaked by heavy rains, conditions at the pit are among the toughest in the mining industry.
But government interference in the lucrative mine has proven more difficult to deal with than even the harshest of conditions. Freeport, the Phoenix-based mining company, is locked in a dispute with the government over its contract to operate in the country — and in turn whether the Grasberg mine will ever be developed to its fullest potential.
The dispute led to a ban on copper exports from the mine for almost four months, which was only lifted after Freeport threatened to suspend work on a multibillion-dollar project that will sustain production at Grasberg until 2041.
The two sides now have a six-month window to craft an agreement that will allow Jakarta to meet a popular desire for control of more of its natural resources, while giving Freeport the assurances it needs to keep investing at Grasberg.
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