Fight for World’s Biggest Gold Mine Isn’t Over, Says Former CEO – by Karlis Salna and Yoga Rusmana (Bloomberg News – September 15, 2017)

The landmark deal that forced Freeport-McMoRan Inc. to cede control of the world’s biggest gold mine and second-largest copper mine to Indonesia may not be the final outcome as both sides prepare for a politically charged fight over the price of the asset and how it will be run, according to the U.S. company’s former chief in Indonesia.

Chappy Hakim, who once led the nation’s air force and who remains an adviser to Freeport Indonesia after his resignation as chief executive in February, said the political nature of the negotiations, which have been going on for years, make it unpredictable as to what both sides will finally agree.

“They can go somewhere we don’t expect,” Hakim said in an interview in Jakarta. “There are a lot of side interests involving politicians. That’s why I don’t like it. Politicians are like golfers that have a lot of power but no direction.”

The bitter confrontation over Grasberg is the nexus of a struggle within the government to gain popular support by wresting greater control over the country’s resources while trying not to scare off badly needed investment.

Indonesia is one of the most resource-rich countries in the world, but foreign direct investment in its mining sector was negative in the second quarter of 2017, with companies divesting $625 million, the worst exodus since 2012.

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