JAKARTA The chief executive of U.S. mining company Freeport-McMoRan and two Indonesian ministers publicly declared on Aug. 29 an end to an acrimonious dispute over a giant copper mine in Papua that has raged for months.
The deal is seen as a testament to Indonesian President Joko Widodo’s resolve to balance foreign investment with national interests. CEO Richard Adkerson told a press conference that Freeport has agreed to relinquish a majority stake in its subsidiary, Freeport Indonesia, to local interests in exchange for extending the Papua mining contract by 20 years to 2041.
Dressed in a traditional batik shirt, Adkerson cut a very different figure to his last public appearance in Jakarta in February, when he wore a black suit and threatened the government with arbitration.
With open-pit resources depleting at the company’s Grasberg copper and gold mine in Papua, Freeport now has the “confidence” to invest up to $20 billion in developing underground mining operations, Adkerson said. The agreement will require Freeport to build a smelter over the next five years to process copper concentrate.
Local media presented the presumptive deal as a success for Widodo in attracting investment to the energy sector while promoting national ownership. The deal is far from done, however, as key details remain to be resolved.
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