By Anita Rachman
JAKARTA, Indonesia-Indonesia said Wednesday it had granted U.S. mining giant Freeport McMoRan Inc. a one-month extension to continue work at one of the world's largest copper mines while the two parties move closer to a deal that will give Jakarta control of the venture.
Bambang Gatot Ariyono, director general for coal and minerals, said the government expected to conclude negotiations with Arizona-based Freeport this month to take majority control of Freeport's local subsidiary, PT Freeport Indonesia, which has mined the lucrative Grasberg copper-and-gold mine in remote eastern Indonesia for decades.
He said Freeport had been granted a one-month extension to continue mining until July 31. Freeport's previous operating permit, granted in January, expired at the end of June. Freeport had proposed extending the permit another six months, local media reported.
Freeport owns about a 91% stake in its Indonesian venture, with the government holding the rest. The world's largest publicly traded copper miner said last year that it would give up its majority stake in Grasberg in line with new rules for foreign miners, dropping to 49% as Indonesia seeks a greater share of the wealth from the country's vast mineral resources.
"It's nearing final," Mr. Ariyono told reporters. He said he expects that by the end of this month, the government would resolve issues relating to the divestment, including requirements forcing Freeport to build a new smelter, ensuring contract terms, establishing a new tax regime and addressing concerns over environmental waste at the mountaintop mine.
-- Write to Anita Rachman at [email protected]