Freeport committed to meet long-term export contracts

Papua-based copper and gold mining company PT Freeport Indonesia, a subsidiary of Freeport-McMoRan Copper & Gold Inc, said it would be difficult for the company to cut its exports because a larger part of the company's copper and gold concentrates sales to foreign buyers were based on long-term contracts, Bisnis Indonesia reported on Monday.

Budiman Moerdijat, the company's newly appointed corporate communications manager, said in Jakarta Sunday that all the concentrate sales including to PT Smelting, the company's only Indonesian buyer, were based on a long-term contracts.

"While we are seeking for better term and conditions for our concentrate exports, we have to honor the existing contracts," said Budiman.

Simon Felix Sembiring, the director general of coal and geothermal at the ministry of energy and mineral resources has said that the government would guarantee the supply of copper and gold concentrate to investors willing to build a new smelting plant.

He said that in order to provide enough raw materials for the new plant, the government would require Freeport to cut its export contracts and sell the concentrate to the local smelting plants. "All the contracts should be canceled and the processing of the concentrate should be made at home," he added.

The government is considering to build a second copper and gold smelting plant in order to get more added value from the country's copper and gold production, including to those from Freeport.

Earlier report said Freeport would support investment in new concentrate smelting, but the firm would not participate in the investment as it only focused on mining.(*)