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resident Susilo Bambang Yudhoyono has approved a deal on a renegotiated mining contract involving a subsidiary of US-based giant Freeport-McMoRan Copper & Gold, PT Freeport Indonesia, three months prior to leaving office.

In a limited Cabinet meeting on Thursday, the president gave his approval to mining contracts that have been renegotiated, including that with Freeport, Coordinating Economic Minister Chairul Tanjung said. '€œIf there is anything that needs to be followed up, it must be done quickly,'€ Chairul said.

The government is struggling to renegotiate a number of previously approved contracts of work (CoW) for minerals and coal that have to be adjusted in line with the 2009 Mining Law. As many as 107 CoW are subject to renegotiation, covering six main issues.

Earlier this month, the government announced that Freeport Indonesia had agreed in principal to the renegotiation of the six issues. The deal will be sealed under a memorandum of understanding (MoU) that will form the basis for the drafting of the amended CoW.

'€œAfter they comply with the MoU, the Energy and Mineral Resources Ministry will issue an export recommendation for Freeport to the Trade Ministry, which will issue export permits,'€ Chairul said. The MoU is expected to be signed soon after Idul Fitri.

In a Freeport-McMoRan statement released late on Wednesday, it said that under the MoU, Freeport Indonesia would agree to provide a US$115 million surety bond to support its commitment to building a smelter, pay lower export duties that will decline as the smelter construction progresses and pay increased royalties of 4 percent for copper and 3.75 percent for gold from the current rates of 3.5 percent and 1 percent, respectively.

Freeport has halted its copper-concentrate exports since Jan. 12, when the government imposed a mineral-ore export ban in compliance with the mining law. The government has actually relaxed the ban by allowing exports of semi-finished products, such as concentrate, until 2017 subject to export duties.

Freeport and other semifinished mineral producers have criticized the regulation, saying the duties, which are regulated under a Finance Ministry regulation and start from 20 percent, gradually increasing to 60 percent in 2016, are too harsh. Moreover, Freeport and another copper miner PT Newmont Nusa Tenggara, a subsidiary of Newmont Mining Corp., claim the export duties contravene their CoW.

The government has insisted companies complete their renegotiations before moving on to talks about reducing export duties for mineral producers committed to building smelters.

Following the approved renegotiations, the president also approved the issuance of new export duties for companies willing to build smelters.

'€œ[The president told] the Finance Ministry to issue a new regulation on export duties for companies that have already complied with the Mining Law and the existing government regulation,'€ Chairul said.

He declined to reveal the new scales of export duties the companies will be expected to pay.

Freeport hopes to resume exports in August. '€œIn the event that Freeport Indonesia is unable to resume normal operations for an extended period, the company intends to implement plans to reduce operating costs, defer capital expenditures and implement workforce reductions,'€ it said.