COPPER-GOLD: Freeport caves in to Indonesian government over Grasberg interest

[caption id="attachment_1003719797" align="aligncenter" width="474"] The shift from the pit to block caving at Grasberg is making Grasberg one of the world’s largest underground mines. (Credit: Freeport-McMoRan)[/caption] INDONESIA – Freeport-McMoRan of Phoenix, Ariz., has agreed to give up control of the world’s second largest copper mine, Grasberg, to the Indonesian government. The announcement comes after escalating public outrage at foreign ownership of the mine. In January the Indonesian government banned ore and concentrate exports, a move that lead to a 15-week shutdown at the mine. Last year the Grasberg mine produced more than 500,000 tonnes of copper and over 1 million oz. of gold. Not only is it the world’s second largest copper mine but also its largest gold producer. A tentative deal has been reached that will give to the government an additional 41.64% of PT Freeport Indonesia, bringing its interest to 51%. Freeport is also committed to building a new smelter in the country within five years. In return, the U.S. company will be allowed to keep the mine open until 2041. The details of the arrangement have yet to be worked out. Rio Tinto also has an interest in Grasberg through a joint venture created in 1995 when the mine was expanded. The venture entitles Rio to a 40% share of production above specified levels until at least the end of 2021. The Grasberg mine has gone underground to block caving. Learn more at www.FCX.com.