Resignation of Freeport`s chairman to create new atmosphere: Sudirman

"This is an internal corporate decision of Freeport McMoran. The government is not involved in it," Sudirman clarified.
Jakarta (ANTARA News) - Indonesias Energy Minister Sudirman Said expressed hope that the resignation of Freeport McMoran Copper and Gold Inc.s Chairman James R. Moffett would create a new atmosphere.

"A new leader will always bring a new atmosphere and working style, including in his/her management of portfolios and stakeholders in Indonesia," he noted in a written press statement received here on Tuesday.

The minister said he always welcomed changes, and the Indonesian government respected the internal decision of the corporation.

"This is an internal corporate decision of Freeport McMoran. The government is not involved in it," he clarified.

Moffett, who is also the companys founder, is being replaced by Gerald J. Ford who is an independent director of Freeport McMoran.

Moffetts resignation came around when the US mining giant was still negotiating the extension of its mining contract in Papua with the Indonesian government.

Freeport is seeking an extension of its contract that will expire in 2021.

The company has expressed its readiness to meet several requirements for the extension of the contract that have been submitted by the Indonesian government, including increasing royalties and investing up to US$18 billion for underground mining, infrastructure, and smelter development.

The contract extension issue has been the reason behind the case of the recorded conversations involving House Speaker Setya Novanto who demanded a stake in the company that led to his recent resignation.

On April 4, 1967, PT Freeport Indonesia had signed a working contract for mining in Erstberg in Papua for a period of 30 years until 1997.

In 1991, Freeport obtained an extension of its contract for another 30 years until 2021 following the discovery of the Grasberg mine in 1988.

The 1991 contract carried a clause that allowed a possible extension of the contract after its expiry in 2021 until 2041.

On December 31, 2012, Freeports proven reserves in Papua were recorded at 2.52 billion tons of ores comprising one percent copper, 0.83 grams of gold ore per ton, and 4.24 grams of silver ore per ton.(*)