Indonesia and Freeport end their squabble over Papua mine – by Erwida Maulia and Wataru Suzuki (Nikkei Asian Review – September 7, 2017)

https://asia.nikkei.com/

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.

For the rest of this article: https://asia.nikkei.com/magazine/20170907/Business/Indonesia-and-Freeport-end-their-squabble-over-Papua-mine

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