- Freeport McMoRan (FCX -0.4%) confirms its agreement to a draft memorandum with the Indonesian government on a contract renegotiation, but cautions that the memorandum has not yet been signed and there is no timeframe for any resumption of copper exports.
- Under the draft MoU, government officials say FCX has agreed to divest 30% of its Indonesian unit, pay a royalty of 4% for copper sales and 3.75% for gold sales - up from 1% previously - and will build a smelter and pay the government a repayable bond.
- The deal is due to be discussed at a cabinet meeting this week and finalized within two weeks, according to Indonesia's industry minister, but any contract agreement could still fail when a new government takes office in October.
- While FCX uses the carrot approach, Newmont Mining (NEM -0.3%) uses the stick, idling its Indonesian operations as part of a potential exit strategy to reflect its smaller operations, which analysts say can't justify a stand-alone smelter.
Freeport says draft MoU agreed but not signed, no export timeframe set
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