Indonesia promises Freeport to extend Grasberg contract

Indonesia promises Freeport to extend Grasberg contract

Freeport McMoRan Copper and Gold's Grasberg mine is the world's largest gold mine and third largest copper mine.

Copper and gold giant Freeport-McMoRan (NYSE:FCX) was trading higher Thursday afternoon after the company announced that Indonesia has promised the company to extent the mining contract for its giant Grasberg mine beyond 2021.

The approval will include “the same rights and the same level of legal and fiscal certainty provided under its contract of work,” the Phoenix-based company said in the statement.

Shares were up 2.61% to $13.35, after climbing more than 10% on Wednesday, when miner said two appointees by billionaire activist investor Carl Icahn were added to the board of directors.

Freeport, the largest listed copper producer, added that the Indonesian government is working on economic stimulus measures, including revisions to mining regulations.

The company, which is under pressure from Icahn and weak commodity prices, said in January it planned to invest $17 billion to build a smelter and for long-term development of its underground gold and copper deposits in Papua province. But in today’s release Freeport didn’t mention any proposal for making companies build a copper smelter in Indonesia or the prospect of Freeport’s local unit selling shares.