Indonesia Issues Kept Freeport in the Limelight Last Week



Indonesia issues

Freeport-McMoRan (FCX) owns the giant Grasberg mine in Indonesia along with Rio Tinto (RIO) (TRQ). The mine is the world’s second-largest copper mine after Escondida, which is owned by BHP-Billiton (BHP). Grasberg mine has been in the news for the last few years due to the ongoing impasse between Freeport and the Indonesian government. We should remember that the two sides are negotiating the terms to extend Freeport’s mining license in Indonesia beyond 2021.

In August, Freeport announced a framework with Indonesia to resolve the issue. However, the framework lacked crucial details, especially on the valuation part. You can read Why Freeport Investors Will Likely Postpone the Celebration for more information.

Shooting incidents

Meanwhile, along with the tough negotiations with the Indonesian government, Freeport’s Indonesia operations have recently faced troubles from a rebel group in Indonesia. According to Reuters, “Since August at least 12 people have been injured and two police officers have been killed by gunmen with suspected links to separatist rebels.”

Citing unnamed company sources, the report adds, “Freeport has asked family and household members of its employees to prepare over the weekend for a temporary relocation from the mining town of Tembagapura, about 10 km (6.2 miles) from Grasberg.” However, “Workers have been asked to stay behind and maintain their work schedule.”

Furthermore, according to Reuters, there was a fire incident at the “Amamapare port in a plant where copper concentrate from the giant Grasberg copper mine is processed before loading onto vessels for shipping.” However, citing Riza Pratama, Freeport’s spokesperson, the report adds that “the incident would have no impact on shipments.”

In the next article, we’ll see what kept Glencore (GLEN-L) in the news last week.

More From Market Realist