Freeport to divest 12% of mine to Indonesia, CNBC says

US miner Freeport-McMoRan Inc. has agreed to divest a 12% share in its Indonesian unit to the government for free, CNBC Indonesia reported, citing the head of the country’s Danantara sovereign wealth fund Rosan Roeslani.

Freeport’s chief executive officer Kathleen Quirk agreed to grant the shares to Indonesia “free of charge” when met by Roeslani in the US, he said in Jakarta on Tuesday. The divestment is part of an agreement to extend the company’s license to operate the giant Grasberg copper mine in central Papua past 2041.

The company said in a statement that Freeport and PT Freeport Indonesia continue advanced discussions with the Indonesian government regarding a long-term extension of operating rights beyond 2041. “The parties are working to conclude an agreement that would be beneficial to all stakeholders,” said the statement.

Roeslani didn’t immediately respond to a message seeking comment.

The Indonesian government already owns a 51% share of PT Freeport Indonesia after the US firm agreed to divest the stake in 2018. Talks over the deal dragged on for years, covering everything from tax rates to the way the company dealt with waste from the mine.

Production at the world’s second biggest copper mine was halted for weeks in 2017 after the government banned concentrate exports, while the US miner threatened to take Indonesia to arbitration over new mining laws it said had violated its contract.

Freeport recently declared force majeure after about 800,000 tons of mud flooded underground tunnels at Grasberg, killing at least two workers. The company has slashed its production guidance for this year and next, causing shares to plunge.

(By Eddie Spence)