Freeport-McMoRan Inc. (NYSE:FCX)
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5 Years : From Jul 2012 to Jul 2017
Freeport McMoRan Copper & Gold Inc. (FCX) said its contract with the Indonesian government will protect the company's ownership of its Grasberg copper operations from new rules requiring foreign investors to reduce direct stakes in mines.
Indonesia will require foreign investors to gradually reduce their stakes in mineral and coal mines until they reach a maximum 49% ownership, from previous limits of 80%, the Energy and Mineral Resources Ministry said Wednesday.
The rule change will affect new contracts or the renewal of existing contracts, a senior Indonesian official told Dow Jones Newswires.
Freeport McMoRan, the world's largest listed copper producer, signed an agreement, known as a contract of work, with Indonesia in 1991 for 30 years with two 10-year extensions.
"Our Contract of Work does not require Freeport-McMoRan to divest any portion of its ownership in PT Freeport Indonesia or PT Indocopper Investama," Freeport McMoRan spokesman Eric Kinneberg told Dow Jones Newswires in an email.
Freeport McMoRan owns 90.64% of PT Freeport Indonesia, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. The government of Indonesia owns the remaining 9.36% of PT Freeport Indonesia.
The parent company has previously said that any changes to the contract of work would require mutual agreement between Freeport McMoRan and the government of Indonesia. Freeport McMoRan also said it has agreed to voluntarily divest at fair market value a 9.36% stake and is in discussions with potential acquirers, including the Province of Papua.
The company also confirmed previously announced plans to restart work at Grasberg on March 12. Operations at the world's third-largest open-pit copper mine were interrupted by a labor strike last year, and Freeport McMoRan said its 2012 forecast gold and copper sales remain under review and will be updated to reflect the disruptions.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; firstname.lastname@example.org
--Deden Sudrajat in Jakarta contributed to this article.