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iant gold and copper producer PT Freeport Indonesia is contemplating the possibility of processing its mineral ores at local existing smelters so it can continue exporting.

The move is in line with the government'€™s demand '€” as stipulated in the 2009 Mining Law '€” for the subsidiary of US-based Freeport McMoran Copper and Gold Inc., as well as gold and copper miner PT Newmont Nusa Tenggara, another US-based firm, to process their ores locally or face an export ban.

The law bans mining firms from exporting unprocessed ore from 2014 and requires the firms to build local smelters or to cooperate with smelting companies to process the ore. The legislation aims to help develop the downstream industry.

On Friday, Freeport president director Rozik Soetjipto, accompanied by independent commissioner Marzuki Darusman, met Industry Minister MS Hidayat to convey the miner'€™s readiness to carry out a feasibility study through Hess Corporation, another US-based firm.

'€œThey spoke of preparations for supply agreements with three national companies, starting with a memorandum of understanding [MoU] scheduled to be signed in August,'€ said Hidayat, adding that the company promised to finish the study in six months.

'€œWe should enforce the law without any exception. No company will be excluded from the rule.'€

Freeport, along with Newmont, has refused to establish its own smelters because it would not be economically feasible.

According to Soetjipto, the three local copper smelters that are in talks with Freeport are PT Nusantara Smelting, PT Indosmelt and PT Indovasi Mineral Indonesia.

Currently, Freeport processes around half of its copper concentrate at PT Smelting Gresik'€™s smelter in Gresik, East Java, the smelter processes about 30 percent of Newmont'€™s copper output.

Hidayat said discussions had also covered divestment, a program that is in line with Freeport'€™s contract.

Indonesia currently owns a 9.36-percent stake in Freeport Indonesia. (asw)