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"The extension…is part of our efforts to finalise…negotiations [with PT-FI]"

Indonesia finance minister Sri Mulyani Indrawati told reporters this week the government had extended PT Freeport Indonesia’s temporary permit to June 30 as negotiations continue over the future ownership of the giant Grasberg copper-gold mine.
"The extension…is part of our efforts to finalise…negotiations [with PT-FI]" "The extension…is part of our efforts to finalise…negotiations [with PT-FI]" "The extension…is part of our efforts to finalise…negotiations [with PT-FI]" "The extension…is part of our efforts to finalise…negotiations [with PT-FI]" "The extension…is part of our efforts to finalise…negotiations [with PT-FI]"

Indonesian finance minister Sri Mulyani Indrawati

Staff reporter

Indonesia had implemented a ban on copper concentrate exports in early 2017 as it pushed for PT-FI to convert its Contract of Work into a special licence (IUPK) under new mining regulations which required companies to build smelters and move towards 51% local ownership.

PT-FI's 90.6% majority owner Freeport-McMoRan (US:FCX) agreed in August to divest its stake to 49% at "fair market value" but negotiations hit a sour note three months ago, with FCX CEO Richard Adkerson saying the company was "prepared to discuss a path forward but cannot negotiate on the basis of the government's September 28 proposal".

The Jakarta Post said the extension of the temporary permit to mid-year indicated both parties were unable to reach agreement by the January 10 deadline.

Indrawati said on Tuesday that the extension would provide certainty for PT-FI's operations while talks were ongoing, the Post reported.

"The extension of the IUPK until June 2018 is part of our efforts to finalize four key points in our negotiations [with PTFI]," it reported Indrawati saying, referring to contract extension, divestment, smelter construction and fiscal and legal certainty for Freeport's planned long-term investment.

Jefferies has described the possibility of the government buying Rio Tinto's (LN:RIO) interest - which entitles it to 40% of Grasberg's production from 2022 - as "an elegant solution" for Freeport.