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mid concerns of a negative impact on the local economy, the Energy and Mineral Resources Ministry has eased its stance over requirements for copper miner PT Freeport Indonesia to obtain an export permit extension.

Energy and Mineral Resources Minister Sudirman Said stated that the government was open to negotiation after the company requested that it be allowed to deposit US$530 million as a guarantee that it would develop a smelter.

According to an estimate by the ministry, the amount is what the company should have spent so far on building a smelter.

'€œI'€™ve received a report that the company is asking for further consideration as it is currently affected by low commodity prices and poor finance. So if it cannot meet the requirements, let'€™s find a solution regarding things that can be a guarantee for its commitment to proceed with the smelter project,'€ Sudirman said on Wednesday.

Freeport Indonesia, a subsidiary of US-based Freeport-McMoRan Inc, has a contract of work to mine in Papua. The company is currently seeking a recommendation from the ministry'€™s mineral and coal directorate general for an extension of a permit to export copper concentrate for another six months. Its current permit expires on Thursday.

The minister earlier said the permit would be extended for another six months if the company met two requirements, namely agree to pay 5 percent export tax and a $530 million escrow deposit as a consequence of sluggish progress in the build of a smelter in Gresik, East Java. The smelter, which is estimated to cost $2.1 billion, is an obligation for mining firms as stipulated in the 2009 Mining Law.

Freeport Indonesia previously claimed that it had progressed 30 percent with the smelter project and expected to hold the groundbreaking in July this year. However, the mineral and coal office has refuted the claim, particularly because there were no physical signs of the project in Gresik.

Disruption in the company'€™s ability to export will severely harm its operations, particularly because Freeport Indonesia continues to export most of its copper concentrate production and only delivers some to a domestic copper smelter.

During its release of 2015 earnings on Tuesday (early Wednesday Jakarta time), Freeport-McMoRan, which recently faced turbulence in its management lineup and business due to investment in the oil and gas sector, said it was confident of reaching a deal with the Indonesian government.

However, its CEO, Richard Adkerson, expressed the company'€™s objection to the requirements of 5 percent export duty and a '€œsizeable escrow deposit to support smelter development'€.

'€œThese points are inconsistent with the arrangements that agreement that we had worked out with the government on beginning in mid 2014 and our discussions with the government continues,'€ Adkerson said.

'€œ[...] we have full confidence that the government will come up with a favorable decision and issue the export license to insure continuity of our mining operation and in doing so will serve the interests of Indonesia'€™s mining industry in general.'€