Diversified miner Rio Tinto restated on Wednesday its decision to continue discussions regarding the future of its stake in the Grasberg mine in Indonesia.
“There is no doubt that Grasberg is a world-class resource. However, there’s a difference between a world class resource and a world class business,” Chief Executive Jean-Sebastien Jacques said on Wednesday, responding to a shareholder at the company’s annual general meeting in London.
Rio Tinto chief executive Jean-Sebastien Jacques. Photo: Bloomberg
“Rio Tinto will have to come to a conclusion about whether we want to stay or not… we will inform the market as and when the situation evolves,” he added.
Rio Tinto has a joint-venture with Freeport-McMoRan for the Grasberg copper and gold complex in remote Papua, with rights to 40 per cent of production above specific levels until 2021 and 40 per cent of all production after 2021.
The future is uncertain for Rio’s involvement in the Grasberg copper and gold mine. Photo: Supplied
Freeport’s exports of copper concentrate from Grasberg, the worlds richest copper mine, have been at a standstill since mid-January, when Indonesia introduced rules that are intended to improve revenues from its resources and create jobs.
The company, the biggest publicly-listed copper miner, has lost $US1 billion since the export of copper concentrate from Grasberg was halted.
The government has lost millions of dollars in royalties and is worried about layoffs and a slowing economy in the restive Papua region.