Freeport-McMoRan's Grasberg Project in Indonesia Gets OK for Mine Life Extension

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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy and mining company Freeport-McMoRan Incorporated (NYSE:FCX) (Phoenix, Arizona) announced that the government of Indonesia will approve the planned extension of operations at Freeport's Grasberg mining and processing project beyond 2021. Industrial Info is tracking progress at the $1.2 billion Grasberg project, as well as more than $11.5 billion in other projects worldwide involving Freeport.

Freeport is constructing a 160,000-ton-per-day copper/gold/silver mine that will use a block-caving mining method. Copper ore will be transported by conveyors and haul trucks to the processing plant. The project is being managed by local subsidiary PT Freeport Indonesia (Timika, Indonesia), with DYWIDAG-Systems International Pty Limited (Hunter, New South Wales) serving as a contractor.

Freeport plans to transition the facility from open pit to underground in late 2017, and its capacity is expected to eventually reach 240,000 tons of ore per day. As part of the agreement, the company must maintain its $18 billion investment in Indonesia.

Indonesia is trying to boost employment and economic and growth through stimulus measures, including revisions to its longstanding mining regulations. According to a press release from Freeport, the government assured the company that it will approve Grasberg's extension of operations beyond 2021, including "the same rights and the same level of legal and fiscal certainty."

"We are pleased with the assurances from the government of Indonesia of legal and fiscal certainty, and look forward to continuing our long term partnership and investment plans to advance the economy, jobs and economic velocity in Papua," said James R. Moffett, the chairman of Freeport, in a press release following the announcement.

Among the other Freeport projects tracked by Industrial Info is the $2.3 billion construction of a copper smelter in Gresik, Indonesia, which is expected to source its copper ore feedstock from the Grasberg project. The planned facility would process 1.6 million tons per year of copper concentrates to produce 400,000 tons per year of cathodes. PT Outotec Technology Solutions (Jakarta Selatan, Indonesia) is serving as technology provider on the project, which is working its way through the permitting phase; if it were to go as scheduled, it would wrap up in second-quarter 2018.

Industrial Info is tracking $1.6 billion in copper-ore mining projects in Indonesia, in addition to the Grasberg project. They include Tigers Realm Group's (Melbourne, Victoria) $250 million construction of a copper/gold mining and processing plant in Banda Aceh, Indonesia. The 20 million-ton-per-year, open pit facility, which is still in the early planning phases, would produce copper concentrates and gold dore.

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