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30 Aug, 2017 13:51

Indonesia wrests control of huge copper mine from American firm

Indonesia wrests control of huge copper mine from American firm

After years of wrangling, US mining giant Freeport McMoRan has agreed to give up its majority stake in the Grasberg copper and gold mine, ceding control to the Indonesian authorities.

The US holding will reportedly be reduced to 49 percent from the current 90 percent with date of transfer to be negotiated.

The world’s biggest publicly listed copper miner also agreed to build a smelter in Indonesia within five years, according to Energy Minister Ignasius Jonan.

Grasberg is the world’s largest gold mine and the third largest copper mine in the Indonesian province of Papua. The US company along with its local unit have been conducting mining and exploration activities in the area for almost 30 years.

On Tuesday, the shares of Freeport closed over two percent lower at $15.21.

The latest decision, which leaves Freeport operating the mine, is seen as a complete victory for Indonesia’s President Joko Widodo. The company will reportedly be allowed to mine until 2041 under a special license.

“The result of this negotiation is in accordance with the instructions of President Joko Widodo to prioritize the national interest, the interests of the people of Papua, the sovereignty of the state in the management of natural resources, and keep the investment climate conducive,” the ministry said.

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The company’s work in the country has been strongly opposed by Indonesians, with locals in the Papua staging violent protests against foreigners mining the country's mineral resources.