PT Freeport resumes partial production activity

Gold and copper giant PT Freeport Indonesia started on Tuesday partial production of copper concentrates to be supplied to the country?s only copper smelter in Gresik, East Java, run by PT Smelting Gresik, Bisnis Indonesia reported on Wednesday.

The paper quoted PT Freeport Spokesman Riza Pratama as saying that the company will only run at 40 percent of its production capacity in accordance with the capacity of PT Smelting, which has recently resumed operation following more than a month-long suspension due to workers strike.

?Freeport has started operation gradually. We?ll operate at 40 percent of normal production (rate) in accordance with the capacity of Smelting,? Riza told the paper.

PT Freeport has suspended production activity in Papua Province since February 10 as its three stockpile facilities have been filled as the company has been unable to continue export of copper concentrates due to disagreement with the government over a new mining policy. PT Freeport, a local subsidiary of US-based Freeport McMoRan Inc, exported about 60 percent of its output.

The government in January introduced a new mining regulation, allowing miners to continue export of mineral concentrates including copper concentrates produced by firms such as PT Freeport only if they agree to meet certain conditions including conversion of their mining permit status from mining contract of work (COW) into special mining business license (IUPK).

While PT Freeport agrees to convert the COW into IUPK, the company demands legal and fiscal terms in the IUPK to be the same as those set under the COW regime, a request the government turns down by the government. PT Freeport has threatened to go to the international arbitration if no solution is reached within the next six months. (*)