Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The Indonesian unit of Freeport-McMoRan Inc and fellow copper miner Amman Mineral Nusa Tenggara (AMNT) are waiting for last-minute mining ministry approvals to their applications to extend copper concentrate exports, company officials said.
Freeport’s export permit for Grasberg, the world’s second-biggest copper mine, is due to expire on Friday, as is Amman’s permit to ship ore concentrate from its Batu Hijau mine on the island of Sumbawa.
Current rules require Freeport and Amman to reapply for export licences every year, and extensions are often granted only once previous permits have expired, creating logistical headaches for the companies.
Current rules require Freeport and Amman to reapply for export licences every year, and extensions are often granted only once previous permits have expired, creating logistical headaches for the companies.
Indonesia’s mining ministry is “still evaluating” the applications and will not issue a recommendation today, said Bambang Gatot, Director General of Coal and Minerals.
Freeport obtained a quota to export 1.1 million tonnes of concentrate in the year ended on Feb. 16. The company has applied for almost the same volume this year, Gatot said.
Once the permit expires, exports will “not stop”, he said, noting that shipments don’t happen every day.
Mine production doesn’t stop, for example, while companies wait for their annual work plans to be approved, Gatot said.
Miners in Indonesia must submit production and development plans every year to be approved by the mining ministry.
Riza Pratama, a spokesman for Freeport Indonesia, said the company’s 2018 work plans were approved last week.
“We hope (export renewal is) smooth and there’s no delay,” Pratama told Reuters.
Under rules issued in 2017, export recommendations are only granted to companies that keep to smelter development timelines.
Freeport’s exports were held up by Jakarta for 15 weeks last year, with domestic processing one of the sticking points.
Freeport had completed just over 2 percent of a long-promised second copper smelter in Indonesia, Bambang Susigit, minerals director at the mining ministry said last week.
The government, though, will also consider progress Freeport has made in other areas in evaluating its export application, he said.
Medco Energi Internasional unit Amman sees shipments at 593,806 wet metric tonnes of copper concentrate in the year ended Feb. 16, a company official said.
Amman had a quota to export 675,000 tonnes during the year. It was not clear how much the company has applied for in 2018.
Amman’s development of copper processing and refining facilities is “running according to plan”, and has been reported to the government, AMNT Senior Government Relations Manager Potro Soeprapto told Reuters.
(Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing by Richard Pullin and Tom Hogue)
