• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 days If hydrogen is the answer, you're asking the wrong question
  • 1 day How Far Have We Really Gotten With Alternative Energy
  • 11 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

This Critical Copper Nation Has Begun Seizing Mines

An important saga for the global copper market is continuing to play out in one top-producing nation. With developments this week showing that the government here is moving ahead with ambitious plans to take greater control of the mining industry.

The place is Indonesia. Where officials said they will soon begin taking larger ownership stakes in projects, pushing existing operators to divest ownership.

Local media reported that the director general for Indonesia’s Energy and Mineral Resources Ministry, R. Sukhyar, has said major producer Freeport McMoRan will be one of the first firms compelled to divest a project interest. With the director general noting that plans are for Freeport to divest an initial 10.6% stake in its Indonesian subsidiary to the government. Related: Is America Missing This Upcoming Mining Hotspot?

The move will take place soon. With the government saying that the divestiture is scheduled to be completed by October of this year.

And this is only a first step. Following this initial tranche of 10.6%, Freeport will be required to divest an additional 10% of its ownership in the local subsidiary–expected sometime in 2016.

The move represents somewhat of a “double whammy” for Freeport. Which is also being forced by the Indonesian government to construct a multi-billion dollar smelter in country. Part of new mining regulations that ban the export of unprocessed ore here.

The government this week extended a temporary approval for Freeport to continue exporting copper concentrate from its existing operations. But officials warned that the major miner needs to move fast in advancing construction of a smelter in order to be allowed this privilege. Related: A Short, But Potentially Critical, Mining Change

For its part, Freeport has indicated that it plans to go along with the divestments–and invest up to $17 billion in its Indonesian operations, including smelter construction.

This shows just how critical these operations are for the company. With management willing to shoulder even the steep terms that have been put forward lately, in order to keep production going.

But the story could be different for firms looking at earlier-stage development and exploration in Indonesia. With the developments above having made the investment climate here notably more risky. Watch for more developments from the government in relation to current projects–and for any resulting changes in mining activity across the country.

ADVERTISEMENT

Here’s to taking stock,
Dave Forest

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News