Freeport to Retain Mining Rights at Grasberg – For Now

US mining giant Freeport-McMoran Inc will hold on to control of operations of the Grasberg mine in Papua, it confirmed after agreeing to government demands to decrease its stake in local unit Freeport Indonesia to 49 percent.

The comments come after long-running negotiations with the government to resolve a permit dispute. The move will see Freeport Indonesia permitted to resume operations until 2041.

Freeport Chief Executive Richard Adkerson, who has been in Indonesia for high level meetings with ministers, said the company will focus on underground mining in the coming years over fears the Grasberg mine reserves are being depleted. Tempo reported that while output once hit 1 million tons of ore per day, the mine currently produces around 100,000 tons of ore daily.

Estimates put the underground mining project cost as up to US$20 billion, with around US$750 million in investment expected over the next year.

The Minerals Ministry Director General of Mineral and Coal Bambang Gatot Ariyono told Tempo Freeport will retain control of the mine, adding that the government must understand the management of the mine before taking control.

Details on the divestment plan are still being hashed out by the two parties and a deadline has not yet been announced.

“The mandate of the president, which has been agreed to by Freeport, is that the divestment should reach 51 percent,” Energy and Mineral Resources Minister Ignasius Jonan said last week, as reported by newswire Reuters.

“All that is left is to discuss the timing. The price will be negotiated later,” Adkerson added at the time.