Freeport Indonesia Aims to Sell More Copper Concentrate Locally

JAKARTA, Feb. 25 -- The Indonesian unit of Freeport McMoran Copper & Gold Inc (FCX.N: Quote) 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.