Freeport Tumbles Most in S&P 500 Amid Doubts on Indonesian Asset – by Danielle Bochove (Bloomberg News – April 25, 2018)

(Bloomberg) — Freeport-McMoRan Inc. says it would be impossible to keep mining Grasberg, its flagship copper-and-gold asset in Indonesia, if it were to adopt new environmental standards unveiled by the state this month.

Within the last two weeks, the Phoenix-based miner was blindsided by “shocking and disappointing” environmental claims from the Ministry of the Environment and Forestry, Chief Executive Officer Richard Adkerson told analysts during the company’s first-quarter earnings call Tuesday. “Nobody could mine this ore body in consistency with these decrees. You just physically can’t do it.”

Located in Indonesia’s Papua province, the high altitude mine is surrounded by rain forest; Grasberg means “grass mountain” in Dutch. For 20 years, the world’s largest publicly traded copper producer has been dumping Grasberg’s tailings into a river, where they make their way downstream to be stored in a “cordoned off area.”

This tailings arrangement was struck in the 1990s, after “transparent” discussions between Freeport, its joint venture partner and the government, Adkerson said on the call.

“It was always controversial,” but the system has been working ever since with “no unexpected environmental consequences,” he said.

For the rest of this article:

Comments are closed.