Indonesia Extends Freeport’s Grasberg Mine Permit Amid Talks on Environmental Impact

  • Indonesia has extended a temporary operating permit for Freeport McMoRan’s Grasberg copper mine in Papua until 31 Jul 18 while discussions continue over long-term rights, a Mining Ministry official said.
  • Freeport has been in negotiations with Indonesia to secure long-term operating rights at Grasberg after the government introduced new rules in 2017 aimed at giving it greater control of its resources. However, efforts to finalize a deal have been overshadowed by concerns over Grasberg’s environmental footprint, compiled in a 2017 state audit of operations which outlined the extent of mine waste and a lack of proper environmental permits. The previous temporary operating permit for Grasberg expired on 30 Jun 18 after being awarded in Jan 18.
  • Freeport’s Grasberg partner Rio Tinto and state-owned mining holding company Inalum are also involved in negotiations on Grasberg, which needs significant investment to develop an underground phase from its current open-pit construction.
  • Inalum may complete a multi-billion-dollar deal to acquire a majority stake in Grasberg in Jun 18, officials said on 30 Jun 18, but details on how Freeport will maintain operational control have yet to emerge.
  • Other matters which include a requirement for Freeport to build a second copper smelter and adopt a new tax regime are nearly finalised.
  • In Apr 18, following the audit, Environment and Forestry Minister Siti Nurbaya Bakar issued two decrees that gave Freeport till Oct 18 to overhaul management of its mine waste.

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