Business
Freeport-McMoRan Updates Status of PT Freeport Indonesia Operations
PHOENIX--(BUSINESS WIRE)--Freeport-McMoRan Inc. (NYSE: FCX) is providing an update on the status of PT Freeport Indonesia’s (PT-FI) operations and its
About this update from Freeport-mcmoran, Inc.
[{"type":"text","content":"PHOENIX--(BUSINESS WIRE)--Freeport-McMoRan Inc. (NYSE: FCX) is providing an update on the status of PT Freeport Indonesia’s (PT-FI) operations and its discussions with the Government of Indonesia on concentrate exports and other matters related to its Contract of Work (COW). Following more than five years of discussions with the Government, in which PT-FI negotiated in good faith to be responsive to the Government’s aspirations while protecting the rights of its stakeholders, the parties have failed to reach agreement. Indonesian government regulations passed in January and February 2017 require that PT-FI terminate its COW and convert to a special license (IUPK) in order to export its concentrate production. PT-FI has advised the Government that attempts to enforce this regulation on PT-FI violates its COW and that it is unwilling to terminate its COW unless replaced by a mutually acceptable form of agreement providing fiscal and legal assurances to support its long-term investment plans in Papua, Indonesia. As a result, PT-FI has been unable to export concentrates and is proceeding with its plan to suspend investments in Papua, reduce its production by approximately 60 percent from normal levels and implement cost savings plans involving significant reductions in its work force and spending levels with local suppliers. On February 17, 2017, pursuant to the COW’s dispute resolution provisions, PT-FI provided formal notice of an impending dispute to the Government listing the Government’s multiple breaches of the COW. Richard C. Adkerson, FCX President and Chief Executive Officer, said: “Despite extensive efforts to reach an agreement with the Government, we have been unsuccessful in achieving a resolution that would avoid the negative impacts for all stakeholders, especially for our workforce and the local economy. We are simply asking the Government to honor our legally binding Contract. We urge the Government to honor the Contract and demonstrate that the Country remains open for foreign investment. This would be in the best interests of all stakeholders, including the Government of Indonesia, our large work force, the local community, local suppliers and Freeport’s shareholders.” PT-FI’s first quarter production has been adversely impacted by the suspension of concentrate exports and a temporary outage since January 19, 2017...