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Freeport-McMoran, the world's biggest listed copper company jumped 13%

Shares in Freeport-McMoran, the world’s biggest listed copper company, jumped in morning trading in New York as a higher copper price and news of constructive discussions with the Indonesian government over its operating license offset revised sales guidance. The stock rose as much as 12.5 per cent to a five-month high of $14.58 after Freeport’s chief executive Richard Adkerson said he was optimistic of reaching an agreement with Jakarta over its contract to operate in the country and run the giant Grasberg copper deposit. “We are now approaching a stage where both parties have expressed an objective of a near term resolution,”



Freeport chief executive Richard Adkerson told analysts and investors on a post results conference call. “I believe we are seeing that objective being more clearly identified by senior levels in the Indonesian government than we have seen in the past,” he added. Freeport has been embroiled in a bitter dispute with the government in Jakarta over its contract to operate Grasberg, the world’s second biggest copper mine. Indonesia wants Freeport to tear up its existing agreement and switch to a special mining license and also divest a majority stake in its local subsidiary to domestic investors. Freeport says it won’t meet these conditions unless it gets the same legal and fiscal assurances as under its existing deal — a contract that has been in place for decades. The dispute threatens plans for a multi-billion dollar expansion of Grasberg, which is situated in one of the most remote parts of Indonesia. Mr Adkerson told analysts and investors that Freeport was set to start direct discussions with leading ministers in Jakarta with a view to having a deal in place by the end of the year. “We are going to be talking about mutual objectives of extending our operating rights, providing Freeport with assurances on fiscal and legal terms that would give us the confidence to invest in these big underground projects that we have in our plans. And we are being responsive to the goal of the Indonesia government about divestment and about smelter investments,” he continued. “We are moving to the next stage. We have a mutual sense of optimism that we can find an agreement.” Ahead of the call, Freeport cut its sales guidance because of labour issues at Grasberg.

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