Indonesia and Freeport Sign Copper Export Memorandum of Understanding

Negotiations on the settlement of tax disputes on copper exports between Indonesia and the US miner Freeport-McMoRan Copper & Gold ended with the conclusion of mutually beneficial agreements.

After the agreement was signed, the company's share price increased to a new 52-week high. Freeport shares traded in New York this week at $ 38.74. The agreement is seen as an important step for the Arizona-headquartered firm seeking to restart the copper business. Indonesia has adopted new export regulations and introduced a progressive tax on the export of concentrates.

Chairul Tanjung, Indonesia's Minister of Economy, said the negotiations had been successfully completed. The project still requires approval from the president. Not only Freeport, but fellow miner Newmont Mining has also fought against new export regulations in Indonesia.

Last week, Newmont's Indonesian bloc filed a petition for international arbitration, but was unable to resolve the dispute. Due to disputes, the company announced force majeure events at its Batu Hijau copper mine last month.

Both Newmont and Freeport have previously contested a progressive tax that starts at 25 percent and will rise to 60 percent in the second half of 2016. Freeport and Newmont contribute 97 percent of Indonesia's copper output. Freeport-McMoRan is one of the leading US natural resource companies with significant mineral assets.