Freeport Indonesia aims to sell more copper concentrate locally

* Freeport says talks with two smelters halted

* Small processing capacity may prevent bigger sale

By Yayat Supriatna

JAKARTA, Feb 24 (BestGrowthStock) – The Indonesian unit of Freeport
McMoran Copper & Gold Inc (FCX.N: ) said on Wednesday it is would
sell more copper concentrate to a local smelter as required by
a new mining law, but that talks with the smelter have stalled.

Under the new law, miners must process minerals using their
own facilities or by sending minerals to be processed in other
companies in Indonesia.

However, lack of domestic processing capacity means the
implementation is likely to be slow.

Freeport Indonesia, which operates the huge Grasberg mine
in Papua province, sells about 300,000-500,000 tonnes of its
copper output a year in Indonesia, or roughly 30 percent of its
total production.

“PT Freeport Indonesia is ready to supply more copper
concentrate to domestic copper smelter,” said Armando Mahler,
president and CEO of PT Freeport Indonesia.

Mahler said two Indonesian smelters, PT Nusantara Smelting
Corporation and PT Indosmelt, had requested supplies of copper
concentrate but talks between them had halted.

Currently, PT Smelting is the only Indonesian smelter to
handle copper smelting. Last year, it said it expected its
copper cathode production to rise 8 percent to 280,000 tonnes
for 2009.

PT Smelting supplies between 40-60 percent of its output to
local cable producers and copper rod producers.

Investing Research

(For a factbox on new mining regulation, double click:
[ID:nJAK279731])
(Writing by Aloysius Bhui; Editing by Sara Webb)

Freeport Indonesia aims to sell more copper concentrate locally