Indonesia grants new mining permit to Freeport-McMoran

Indonesia has issued a permit to US miner Freeport McMoran that could allow for a resumption of exports from the world’s second-largest copper mine after almost a month’s standoff.

Freeport can apply immediately for an export permit, Reuters reported, citing an official at the country’s mining ministry. That could allow exports of copper concentrate from the giant Grasberg mine.

A spokesman for Freeport, however, said there is still no agreement. “Exports remain restricted as a result of the January 2017 regulations,” he said.

Copper prices have risen 5 per cent since Freeport’s exports were stopped on Jan. 12 following the issuance of new regulations on exports of unrefined metals. They rose 4 per cent on Friday to trade at $6,070 a tonne – the highest level in over a year, boosted by a cut in output from Chile’s Escondida mine, the world’s largest, following a strike.

The dispute with Indonesia has raised questions about the project for its other partner, Rio Tinto. Under a contract with Freeport, Rio receives a small share of Grasberg’s production until 2021, after which it will be due 40 per cent of output.

This week Rio’s new chief executive Jean-Sebastien Jacques said the company is going to “watch very carefully what’s happening before we commit additional material money into the project.”

“Grasberg is a world-class resource but the question is whether it is a world-class business for Rio,” said Mr Jacques.