(Adds mid-February deadline, copper prices, analyst comment, updates stock decline)
By Susan Taylor
TORONTO, Feb 3 (Reuters) - Freeport-McMoRan Inc, the world’s biggest publicly-listed copper miner, said on Friday it will cut staff, spending and production in Indonesia if it does not get a new export permit by mid-February, amplifying a warning it made last week.
The Phoenix-based miner said it continues to work with the Indonesian government to resolve issues after exports of its copper concentrate were halted Jan. 12. The Southeast Asian country banned export shipments of semi-processed ore to boost its local smelter industry.
Freeport shares were trading 5.7 percent lower at $15.85 on Friday afternoon. Last week, the stock dropped nearly 6 percent after the company outlined its Indonesian challenges, issued disappointing financial results and cut its 2017 production forecast.
Freeport said it has the right to export copper concentrate from its Grasberg mine in Indonesia without restriction or export duties under its current contract, and was considering alternatives to enforce its rights.
For every month it awaits export approval, Freeport said its share of production will be reduced by about 70 million pounds of copper and 70,000 ounces of gold.
“A prolonged production cut could push the market into deficit and prices much higher,” RBC Dominion analyst Fraser Phillips said in a note to clients.
Copper prices touched a two-month peak earlier this week as workers at the world’s largest copper mine, Escondida in Chile, voted to strike. On Friday, prices drifted down to $5,772 a tonne, near a two-week low, as the mine’s workers resumed wage talks.
If the export delay in Indonesia continues, Freeport said it would need to make “near-term” production cuts to match capacity at its smelter, which processes about 40 percent of its concentrate production.
It will also need to “significantly adjust its cost structure,” reduce staffing, investments on underground development projects and a new smelter, and spending with suppliers.
Delays for another new export license, for anode slimes required in smelter operations, could further hurt operations, Freeport said.
To gain a new special mining license, Freeport must agree to pay taxes and royalties that it is currently exempt from and divest up to 51 percent of its Indonesian unit, up from 30 percent under current rules. To date, it has divested only 9.36 percent. (Reporting by Susan Taylor; Editing by Bernadette Baum and Paul Simao)