Freeport Indonesia boss steps down

Freeport Indonesia boss steps down

The deposit was first discovered in the 1930s and Freeport McMoRan has been mining copper, silver and gold at Grasberg in remote Indonesia since the 1970s. In terms of reserves, Grasberg is still the richest deposit on the planet.

The chief executive of Freeport McMoRan’s Indonesian unit, Maroef Sjamsuddin, has resigned Tuesday, less than a month after the chairman of the U.S. mining giant stepped down.

His resignation, said to be for “personal reasons” according to Reuters, follows an inquiry into the Indonesian parliamentary speaker spearheaded by Sjamsuddin. The probe ended up forcing the speaker to leave in December amid corruption allegations. The matter is still being investigated by the attorney general’s office.

Arizona-based Freeport-McMoRan (NYSE:FCX) — which operates Grasberg, one of the biggest copper and gold mines in the world in Indonesia's far-eastern Papua region— is negotiating with the government for an extension of its contract, which is due to expire in 2021.

The extension of Freeport’s permit is also part of a requirement by Jakarta that the company sell more than 10% of its operating unit inside the country to the government of the South East Asian nation, which already owns 9.4%.

Sjamsuddin resignation further complicates the firm’s situation, as it is also battling with weak commodity prices and executive changes, as well as Indonesia's ban on the export of unprocessed minerals.

More than 90% of Freeport's gold production, and a significant amount of its copper, comes from its Grasberg operation, which has long been the subject of inquiries following deaths and strikes involving its workers, as well as pollution charges.

Freeport was worth $5 billion on the New York Stock Exchange on Tuesday, but in the past 12 months the stock has lost almost 80% of its value as the firm struggles to cope with a slide in copper prices to six-year lows, a weaker gold price and continued weakness in oil and gas prices.