Freeport to resume exports from Indonesia, but investors don't like terms

|By:, SA News Editor

Freeport McMoRan (FCX -2.1%) is set to restart concentrate shipments from its Grasberg mine in Indonesia, but shares are lower as the verdict on the deal with the government isn't favorable.

Indonesia reportedly will cut the tax levied on mineral concentrate exports to less than 10% for miners that pay a bond as a guarantee they will build a smelter later.

As part of its deal, FCX would pay higher royalties of 4% on copper sales, after paying between 1.5% and 3.5% under an old deal, and the higher rate will bring it into line with royalties paid by other companies.

In response to the deal and FCX's mixed Q2 earnings, BofA/Merrill downgrades shares to Neutral from Buy and cuts its price target to $40 from $43.

Indonesian officials say no talks have taken place with the second-largest copper miner in the country, Newmont Mining (NEM -2%).