Freeport and Jakarta compromise over Papua mining

The multi national mine, Freeport McMoRan, says it has lost about $US1 billion as a row with Indonesia has crippled its operations in Papua.

Reuters reports that the losses appear to be pushing the Indonesian government and Freeport to resolve the row.

In January, Jakarta forced Freeport to stop the export of copper concentrate from its Grasberg in Papua.

The shut down has also denied the Indonesian government millions in royalties and is worried about layoffs and a slowing economy in Papua.

Indonesia wanted Freeport's local subsidiary to adopt a special licence, pay new taxes and royalties, divest a 51 percent stake in its operations and to relinquish arbitration rights.

Reuters said that Freeport threatened in February to take the dispute to arbitration, saying the rules were "in effect a form of expropriation".

But now, Indonesia has promised to allow Freeport to export its copper concentrate once again, while negotiations will continue over the next six months on contentious issues, including on divestment, economic and legal protection and Jakarta's push for Freeport to build a smelter.

The compromise comes ahead of a visit to Indonesia by U.S. Vice President Mike Spence next week.

Pressure to resolve the row could also come from Freeport's third-biggest shareholder, activist investor Carl Icahn, who was appointed a special adviser to US President Donald Trump and has been critical of actions of Jakarta over the mining company's licence.