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Trouble Brewing for Freeport-McMoRan in Indonesia

By Joel ScanlonFeb 22 2012

As the government of Indonesia renegotiates contracts for mining with multi-national miner Freeport-McMoRan Copper & Gold, there are demands to up the royalties that are earned from the mining company.

Hatta Rajasa, the coordinating minister for economic affairs in Indonesia said that the mining sector royalties were very low. He said that the U.S. owned mining giants were paying just 1% royalty on the total gross sales. The senior minister said on Tuesday that a renegotiation of the royalty fees paid for Freeport Indonesia and Newmont Nusa Tenggara were in order. He however neglected to mention just how high the royalties should be saying that the matter was under discussion.

Freeport Indonesia is a subsidiary of Freeport-McMoRan Copper & Gold while Newmont Nusa Tenggara is the subsidiary of Newmont Mining. Newmont Nusa Tenggara signed a contract in 1986 to mine the Batu Hijau gold and copper mine located in West Nusa Tenggara. This is currently under renegotiation.

Freeport has more than the renegotiation to worry about as its main pipe carrying copper from the Grasberg mine to a port has been cut. The repairs on the pipeline are going to lead to a significant reduction in company production. The exact impact is yet to be calculated by the company but it is yet to declare a Force Majeure.

Written by

Joel Scanlon

Joel relocated to Australia in 1995 from the United Kingdom and spent five years working in the mining industry as an exploration geotechnician. His role involved utilizing GIS mapping and CAD software. Upon transitioning to the North Coast of NSW, Australia, Joel embarked on a career as a graphic designer at a well-known consultancy firm. Subsequently, he established a successful web services business catering to companies across the eastern seaboard of Australia. It was during this time that he conceived and launched News-Medical.Net. Joel has been an integral part of AZoNetwork since its inception in 2000. Joel possesses a keen interest in exploring the boundaries of technology, comprehending its potential impact on society, and actively engaging with AI-driven solutions and advancements.

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APA
Scanlon, Joel. (2019, March 19). Trouble Brewing for Freeport-McMoRan in Indonesia. AZoMining. Retrieved on November 23, 2024 from https://www.azomining.com/News.aspx?newsID=6017.
MLA
Scanlon, Joel. "Trouble Brewing for Freeport-McMoRan in Indonesia". AZoMining. 23 November 2024. <https://www.azomining.com/News.aspx?newsID=6017>.
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Scanlon, Joel. "Trouble Brewing for Freeport-McMoRan in Indonesia". AZoMining. https://www.azomining.com/News.aspx?newsID=6017. (accessed November 23, 2024).
Harvard
Scanlon, Joel. 2019. Trouble Brewing for Freeport-McMoRan in Indonesia. AZoMining, viewed 23 November 2024, https://www.azomining.com/News.aspx?newsID=6017.