Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX) Makes Its Moves In Indonesia


Dallas, Texas 03/11/2014 (FINANCIALSTRENDS) – Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX) will now continue to be troubled by Indonesian government’s laws. The copper producer which has global footprint has its core operations in Indonesian mines located at Grasberg.  The Indonesian government had earlier notified curtailment of crude exports from the countries’ mines by 2017. Unfortunately, the government appears to be relooking at timelines and is already in the middle of proposal to apply high fines on the current exports of crudes itself.

The immediate impact of this imbroglio has been this mining companies stock prices on the stock market. It slid by over $5, indicating there are worse things to happen, if the government were to take front-end approach. Recently, another US based mining company- Newmont Mining found itself dropping prices on the stock market, following the change of policy by the Indonesian government.

Meanwhile, both the companies are opposing the imposition of 25% taxes, before the beginning of term and are disputing the same. The companies will in all probability look to operating with new smelters or look for strategic partnership to overcome the impending ban.

Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX) is fortunate as a mining company as it is not restricted to these politically volatile geographies. It continues to hold mining rights in North America, South America as well. Additionally, these mines output is much higher than the produce of the Indonesian sites.

Additionally, it is expected that Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX) will now explore politically safer regions to further expand its production.

Therefore, experts believe it is a matter of time before FCX manages the scenario in Indonesia, as along with Newmont, it has the expertise to resolve issues, given the inherent risks of this industry. The diversified mining sites only add to the company’s advantages and allow it to balance seasonal downtrends, when political unrest makes its appearance in one region or the other.