Freeport Indonesia could file a lawsuit regarding the new regulation on Indonesian export duties due to objections to its provisions.

Back in July 2023, Freeport Indonesia obtained an extension to its export license for 1.7 million MT of copper concentrate. Freeport was provided an exemption even though there is an export ban until mid-2024.

However, the extension of the license comes an obligation for Freeport Indonesia to pay for copper export duty.

New policy on export duties

The government also implemented a new policy for export duties based on the physical progress of smelter construction.

There are several stages of physical progress in smelter construction, such as:

• Stage I, the level of physical development progress is less than 50-70%;
• Stage II, the level of physical development progress is less than 70-90%;
• Stage III, the level of physical development progress is more than 90-100%.

New export duty rates for copper concentrates

The government also applies export duty rates on copper concentrates which are divided into several categories, such as:

• Copper concentrate with a content of less than 15% copper, with a magnitude of 10% in stage I, 7.5% in stage II, and 5% in stage III;
• Laterite iron concentrate with a content of less than 50% iron and alumina and silica content of more than 10%, i.e. the rate is 7.5% in stage I, 5% in stage II, and 2.25% in stage III;
• Lead concentrate with a content of more than 56% lead, with a rate of 7.5% in stage I, 5% in stage II, and 2.5% in stage III;
• Zinc concentrate with a content of more than 51% zinc, with rates of 7.5% in stage I, 5% in stage II, and 2.5% in stage III.

Freeport reported objections to the export duty because under Freeport Indonesia's 2018 special mining permit, no duty is required after the smelter is at least 50% completed.

According to the submission, in March 2023, the Government of Indonesia verified that the construction progress of the Manyar smelter exceeded 50% and Freeport Indonesia's removed export duties became effective March 29, 2023.

Freeport Indonesia continues to discuss the implementation of the revised regulations by the Government of Indonesia.

This mining company is said to be seeking ways of recovery, until it is ready to challenge this regulation.