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Freeport warns copper export ban could cost Indonesia $2 billion in lost revenue

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JAKARTA: Copper mining company Freeport Indonesia has warned the Indonesian government that a ban on exports of copper concentrate in June could result in a loss of $2 billion in revenue for Jakarta, a company official said on Thursday.

Indonesia’s export ban takes effect in June in a bid to force miners to invest in domestic smelters, thereby adding value to their products and increasing export revenues.

Freeport Indonesia, controlled by mining giant Freeport McMoran although the Indonesian government is the majority shareholder, requested that the ban be lifted because its Gresik smelter would not be operating at full capacity by June.

“If we cannot export, state revenue will fall by about $2 billion, based on current prices,” said Chief Executive Tony Wenas, in comments confirmed by a spokesperson for the state. ‘business.

The comments followed a meeting with President Joko Widodo, during which he was accompanied by Freeport McMoran Chairman Richard Adkerson and new CEO Kathleen L. Quirk.

Wenas reiterated that construction of the Gresik smelter would be completed by May and start operating the following month, reaching full capacity later in 2024.

A spokesperson for the Indonesian Ministry of Mines declined to comment. The president’s office did not immediately respond to a Reuters request for comment.

Wenas previously said Freeport Indonesia would have to cut its ore production by 40 percent this year if the government did not delay the ban.

On Wednesday, Indonesian copper mining company Amman Mineral Internasional said it was also negotiating with the government to ease the ban since its smelter would not be ready by May, arguing that the government was extracting tax revenue from Amman as well. than Freeport.

Freeport also raised the issue of extending its mining permit at the meeting, Wenas said.

Widodo and Adkerson met last November to discuss a 10 percent increase in Indonesia’s stake in Freeport Indonesia and a 20-year extension of its mining permit beyond the current expiration date of 2041 .

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