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Jakarta Post

Freeport still in charge of Grasberg mine after divestment

  • News Desk

    The Jakarta Post

Jakarta   /   Mon, September 4, 2017   /   01:51 pm
Freeport still in charge of Grasberg mine after divestment Freeport McMoRan CEO Richard Adkerson (left), Finance Minister Sri Mulyani Indrawati (center) and Energy and Mineral Resources Minister Ignasius Jonan confer during a joint press conference on Aug. 29 in Jakarta. (JP/Wendra Ajistyatama)

Freeport McMoran (FCX) has stated that it still controls Grasberg mine in Papau, even after the company divested 51 percent of its shares in its subsidiary, PT Freeport Indonesia, as required by Indonesian law.

“FCX will continue to take control over the operation and management of PTFI,” said FCX in its statement last week.

Freeport McMoran CEO Richard Adkerson said his company would concentrate in underground mining next year because of the depletion of reserves resulting from its open mining activities.

Read also: Shaky deal with Freeport

In early the 1980s, the company mined 800,000 to 1 million tons of copper concentrates per day. Currently, it produces 100,000 tons of copper concentrates. The company said the underground mining needed an investment of US$20 billion.

Meanwhile, the Energy and Mineral Resources Ministry’s mineral and coal director general, Gatot Ariyono, confirmed that Freeport would become main operator of the Grasberg mine because Indonesia needed to gradually learn about underground mining.

“It is very technical. We cannot immediately take over,” said Bambang over the weekend as reported by tempo.co.

The divestment agreement with PT Freeport Indonesia was announced by Adkerson during a joint press conference with Finance Minister Sri Mulyani Indrawati and Energy and Mineral Resources Minister Ignasius Jonan on Aug. 29.

The company also agreed to convert its contract of work (CoW) into a special mining permit (IUPK), build a smelter within the next five years and increase its contribution to state revenue from its Grasberg mine in Papua. (bbn)