After a six-month stalemate, a strategic agreement, in the form of a Memorandum of Understanding, was recently signed by the Indonesian government and Freeport-McMoRan. The purpose of the agreement was to open a window for continued negotiations. It provides a six-month term to settle unresolved Contract of Work disputes, including issues of royalties, payments on export duties, and construction of a larger, Indonesian-based smelter.
In the meantime, the agreement allows PTFI to resume exports of its copper concentrate; which, in effect, justifies the company’s recommencement of full production. Even though it’s not the final resolution that the company was hoping for, it’s a welcoming lifeline.
The information written in this post was extracted, and then summarized using my own words, from articles published in the Jakarta Post and on FCX.com and Reuters.com. Also, my personal opinions and views do not reflect the views of Freeport-McMoRan Copper & Gold Inc. or any of its subsidiaries, affiliates, business partners or related business entities.