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UPDATE 1-Indonesia govt optimistic Freeport export permit to be renewed next week -official
February 5, 2016 / 9:45 AM / 2 years ago

UPDATE 1-Indonesia govt optimistic Freeport export permit to be renewed next week -official

* Govt focus is on how to resume exports -official

* Difference in “interpretation” of regulations -official (Adds details and further comment from govt official, Freeport)

By Fergus Jensen

JAKARTA, Feb 5 (Reuters) - Indonesia’s mining ministry is confident U.S miner Freeport McMoRan Inc will be issued with an extension of its copper concentrate export permit next week, a government official said on Friday.

Freeport’s export permit expired last week amid a dispute over a smelter project that the government said has fallen behind schedule.

An extended halt in Freeport’s exports would be a blow to its profits and deny the Indonesian government desperately needed revenue from one of its biggest taxpayers. A stoppage would also buoy global copper prices that fell around 25 percent last year and hit six-year lows in mid-January.

“I am optimistic all of this will be finalised next week,” an official with direct knowledge of the matter told Reuters.

“Our focus is how can exports resume.”

The official, who did not want to be identified because of the sensitivity of the matter, declined to comment on a $530 million dollar bond the government has requested from the Phoenix, Arizona-based miner as a guarantee it will complete construction of another local smelter.

“We also feel optimistic,” a spokesman for Freeport’s Indonesian unit told Reuters when asked whether a renewal of its export permit was likely next week.

The spokesman declined to comment further.

A 2014 rule requires Freeport to invest further in domestic processing as a prerequisite for obtaining its export permits. However, construction of Freeport’s second smelter has not begun yet, the government official said.

“We are pushing so that this can be accelerated,” the official said.

The government is working to ensure that Freeport’s operations run smoothly, but also that the company follows prevailing laws, amid a “slight difference of interpretation of regulations,” the official said. (Reporting by Fergus Jensen; Editing by Tom Hogue)

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