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Freeport, Indonesia copper concentrate export deal nears closing

A deal between Freeport-McMoRan Inc. and the Indonesian government is likely to close soon, which will allow the company to temporarily resume exporting copper concentrate, Reuters reported March 30, citing the country's mining minister.

The deal will allow the company to export concentrate for six months from its Grasberg copper-gold mine in Papua while it negotiates a special long-term export permit with the government.

According to the energy and mineral resources minister, Ignasius Jonan, receipt of the mining permit will be conditional on the company agreeing to build a smelter in the country within five years.

Jonan added that Freeport has agreed to the conditions of the new permit.

As a response to the export ban, the company recently suspended investments in Papua, cut its output at the Grasberg mine by about 60% and implemented cost-saving measures.

The Indonesian government issued a special mining license in February, but Freeport said it was unwilling to terminate the previous contract unless it is replaced by a mutually acceptable agreement providing fiscal and legal assurances to support its long-term investment plans in Papua.

Earlier in March, the company's PT Freeport Indonesia unit resumed production of copper concentrate at the Grasberg mine after more than a month of stoppage.