JAKARTA (TheInsiderStories) - The Indonesian unit of U.S miner Freeport McMoRan Inc must put a further US$530 million into an escrow account among other requirements for the miner to extend its permit to export copper concentrate from Indonesia, a government official said, Reuters reported.
The funds are intended to be a guarantee that PT Freeport Indonesia will complete a smelter in Indonesia, which is pushing to boost returns from its natural resources. The amount would add to an estimated US$80 million the U.S. mining giant set aside in July to obtain its current export permit, which is set to expire on Jan. 29.
The requirement adds to pressure on Freeport, whose stocks have tumbled 36 percent this month and hit their lowest in more than 15 years on Wednesday, hammered by falling prices for copper and oil, which the company also produces.
“This money is the remaining amount they should have spent on their smelter so far,” Coal and Minerals Director General Bambang Gatot told reporters on Friday, adding that his team had not heard back from Freeport on the requirement.
According to Gatot, the smelter project, estimated to be worth up to $2.5 billion, is now 14 percent complete. Energy and Reources Minerals Minister Sudirman Said said on Wednesday the new smelter should be 60 percent complete by now.
“We have warned them from a long time ago,” He said, referring to the export permit deadline.
The smelter and associated infrastructure were at the centre of scandal late last year that resulted in the resignation of parliament speaker Setya Novanto after he was accused of trying to extort shares from Freeport’s local unit.