Boston, MA 06/11/2014 (wallstreetpr) – Freeport-McMoRan Copper &Gold (NYSE:FCX) has seen it necessary to send its Chief Executive Officer to Indonesia in a bid of trying to sort out the standoff between the company and the country’s government over exports from its copper and gold mine. Freeport was forced to halt its operations in January after the government passed stringent laws that have considerably affected how foreign companies export their raw materials for processing purposes.
Indonesia Stringent Taxes
The county’s government passed in’ January increased taxes on copper concentrate exports. The move is seen as one of the efforts that the government is using to force companies to build smelters and processing industries that have the potential of creating more jobs for people in areas of their operation.
Arizona based Freeport-McMoRan maintains that the new laws conflict with initially signed contracts that exempt them from taxes and other duties. Freeport-McMoRan Copper &Gold (NYSE:FCX) accounts for 97% of Indonesia’s copper output. Newly appointed Chief Economic Officer Chairul Tanjung is optimistic that the standoff will be solved sooner than later
Impact of Standoff on the Economy
The government continues to maintain a hard stance, saying that its recent policies continue to be a success seen by the spike in Nickel prices. Reports indicate that there are about 66 smelters in the pipeline sure to bolster the country’s economy through increased job opportunities. The Controversial mineral policy, as well as a halt in mineral exports, could have substantial political ramifications for the next set of leaders as elections approach in July.
The confusion has already halted about $500 million in mineral ore and concentrate exports. If the same continues, it could considerably widen the countries large account deficit. Earlier, the company had confirmed that it had slashed its production in the mines by 60% and that the force majeure was inevitable if the situation persists.
Freeport-McMoRan Copper &Gold (NYSE:FCX) has already threatened of the possibility of slashing down its production and laying off workers if a solution is not found on the standoff.
