By I Made Sentana
JAKARTA--PT Freeport Indonesia expects output from its Grasberg copper and gold mine to rise 30% this year, after falling around 40% last year, the chief executive said Thursday.
"We expect production to recover this year, but I'm not sure it will reach the level before the labor strike [of 2011]," Rozik B. Soetjipto, CEO of the Indonesian unit of Freeport-McMoRan Copper & Gold Inc. (FCX), told Dow Jones Newswires on the sidelines of the Economist Conferences Indonesia Summit.
A rise in production is likely this year as the company will be entering an area with a higher mineral content, said Mr. Soetjipto, a former Minister of Public Works.
Freeport Indonesia during the first three months of last year was still affected by the impact of a prolonged labor strike, and was mining an area with 20% less mineral content "than usual," Mr. Soetjipto said.
The company signed a 30-year 'contract of work' with the government in 1991, with options for two 10-year extensions.
It is discussing with the government to extend the contract, before deciding on further investment, Mr. Soetjipto said.
Freeport-McMoRan is willing to sell up to 10.64% of Freeport Indonesia to local investors by 2021, to satisfy a condition for extension; the government, which owns 9.36%, hasn't yet accepted the offer, Mr. Soetjipto said.
Write to I Made Sentana at [email protected]
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