New tone of cooperation in Indonesia boosting Freeport shares

|By:, SA News Editor

Freeport McMoRan (FCX +1.5%) extends gains following yesterday's news that it would receive a temporary mining permit in a plan to allow exports to resume at its Grasberg copper mine in Indonesia while discussions on longer-term issues continued.

Grasberg's concentrate exports were halted for 12 weeks since the government first announced the new rules amid tough talk and escalating tensions, but the tone has shifted markedly in recent weeks, raising hopes for an amicable settlement.

"A resumption of exports would be a significant positive for Freeport in the near-term and would make us more optimistic about an eventual agreement over the more difficult longer-term issues," says Jefferies analyst Chris LaFemina.

But some analysts have questioned the legal basis of the temporary permit and say the two sides are just kicking the can down the road.