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Shareholders want miner Freeport to get tough with Indonesia - CEO
February 27, 2017 / 3:33 PM / 9 months ago

Shareholders want miner Freeport to get tough with Indonesia - CEO

HOLLYWOOD, Fla. (Reuters) - Shareholders are pressuring miner Freeport-McMoRan Inc (FCX.N) to stand up to the Indonesian government over changes the southeast Asian country wants to make in the U.S. miner’s contract, Freeport’s chief executive officer said on Monday.

Freeport McMoRan Inc's chief executive Richard Adkerson speaks during a news conference in Jakarta, Indonesia, February 20, 2017. REUTERS/Beawiharta

Rio Tinto Plc (RIO.L), which is a partner in Freeport’s massive Grasberg copper and gold mine in Indonesia, is also supportive of Freeport’s tougher approach towards Jakarta, CEO Richard Adkerson said.

In some of his strongest language yet on the issue, Adkerson said the new regulations that Indonesia wants the company to accept were “in effect a form of expropriation of our assets and we are resisting it aggressively.”

“Many of our shareholders feel that we have been too nice. Now we are in the position of standing up for our rights under the contract,” Adkerson told a mining conference in Hollywood, Florida. He said Freeport had held talks with its large shareholders but did not name them.

Freeport, the world’s biggest publicly listed copper producer, warned last week it could take the Indonesian government to arbitration and seek damages over a contractual dispute that has halted operations at Grasberg, the world’s second biggest copper mine.

The row, which centers around the sanctity of Freeport’s 30-year mining contract, comes as the Indonesia government seeks to squeeze more revenue out of its mining industry through a shake-up of regulations over foreign ownership and ore processing.

Reporting by Nicole Mordant in Hollywood, Florida; Editing by Chizu Nomiyama and Jeffrey Benkoe

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