Or at least, so it appears. Potentially bringing to a close one of the most dramatic sagas recently in global resource markets.
The company is Freeport-McMoRan. And the problems are in Indonesia--where the firm has been fighting a government ban on the export of copper concentrate.
Indonesian officials had officially outlawed shipments of non-ungraded copper as of January. Attempting to force miners to build smelters in-country, in order to create value-added metals products here.
But news yesterday suggests that Freeport will soon get some relief from these rules. With government officials publicly announcing that they have reached an agreement with Freeport--covering a complete renegotiation of the major's mining contract in the country.
Officials didn't give details yet on what contract terms have been changed. But the country's Trade Minister Muhammad Lutfi confirmed to the press that his department would issue a permit for Freeport to resume exports of copper concentrate.
This is obviously great news for the company. Which was forced to defer 125 million pounds of copper production (along with 140,000 ounces of associated gold output) during the first quarter, because of the export ban.
It will of course be critical to see what concessions Freeport had to give up in order to get the deal. The Indonesian government has previously said it would consider going easy on companies that deposit funds toward the construction of a smelter for their concentrates. Additional steps could also include the sale of a larger interest to Indonesian investors, and the reduction of concession sizes on the company's properties.
It will also be interesting to see how this development affects fellow Indonesian copper producer Newmont Mining. Newmont last month declared force majeure on its copper output in the country. And has been much more vocal than Freeport in criticizing the government, and threatening legal action such as arbitration.
Whatever the case, it appears that some of the lost copper supply here will be back to market soon.
Here's to working up a solution,
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By Dave Forest
