Freeport, Indonesia Inching Closer to Resuming Copper Exports
Arizona-based Freeport McMoRan is inching closer to resuming copper exports in Indonesia after agreeing on the basic framework for contract renegotiations. The mining company is working with the Indonesian government to resolve a dispute over a mineral export tax before a new administration takes over in October.
Freeport isn’t the only one fighting Indonesia’s increased export tax. In January Newmont Mining suspended copper concentrate shipments when the government first introduced the new mining rules, declaring the rule violates its mining contracts. The two companies account for 97 percent of Indonesia’s copper exports.
The CEOs of both companies met with chief economic minister Chairul Tanjung in Jakarta last week in an effort to resolve the five-month dispute.
"There was a lot of progress and we have moved forward in the renegotiation process, but there are still some processes left," Rozik Soetjipto, Freeport Indonesia CEO, said on Tuesday.
The export tax is part of a government drive to force miners to build smelters and processing plants in Indonesia.
Freeport’s contract with Indonesia can only be renewed in 2019, but the company hopes to resolve the issue by creating a Memorandum of Understanding (MoU).
"In the meeting with Chairul Tanjung, we agreed to the principal points (of the MoU)," Soetjipto said. "The MoU will contain details of the basic points that will become the agreement for (the new contract)."
Freeport McMoRan operates the Grasberg mine in Indonesia, the world’s largest gold mine, and second-largest copper mine. Newmont’s main asset in Indonesia belongs to the Batu Hijau copper and gold mine on the island of Sumbawa Barat.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.