Freeport Indonesia, the country's largest copper miner, has formally requested the Indonesian government to relax its copper export ban and permit the shipment of 1.3 million metric tons of copper concentrate until December. The request, valued at approximately $5 billion, comes as the company grapples with the aftermath of a fire at its new smelter in Manyar, East Java, and a subsequent surge in stockpiled concentrate.

Indonesia, rich in natural resources, implemented a ban on the export of unprocessed ores as part of a broader strategy to boost domestic processing and add value to its commodities. However, Freeport argues that the unforeseen circumstances surrounding the smelter repairs necessitate a temporary exemption. The company’s previous export permit expired at the end of 2024, and the ensuing export halt has led to a significant accumulation of inventory.

Freeport CEO Tony Wenas addressed reporters on Tuesday, stating that the company’s copper mining operations are currently running at only 40% capacity due to the burgeoning stockpile. This production cutback underscores the severity of the situation and the urgent need for a resolution. “We continue to discuss with the government,” Wenas affirmed, expressing confidence that the export relaxation would be granted. “We are certain we can be given (export relaxation), the process is ongoing.”

The Indonesian government has previously hinted at the possibility of easing the ban, provided Freeport fulfills specific conditions. Wenas indicated that the company could guarantee the completion of repairs at its Manyar smelter and ensure its operational status by the fourth week of June. This commitment aims to reassure the government that the export relaxation would be a temporary measure, facilitating the clearing of excess inventory while the smelter returns to full capacity.

The fire at the Manyar smelter in October has significantly disrupted Freeport's operations and its contribution to Indonesia's downstream processing ambitions. The smelter, a key component of the government's value-added strategy, is crucial for converting copper concentrate into refined metal. The forced reduction in production and the inability to export have created a bottleneck, impacting both Freeport's financial performance and the broader Indonesian mining sector.

Freeport was anticipated to resume copper concentrate shipments from Indonesia this month according to media reports. This suggests that discussions between Freeport and the government may be progressing positively, and a resolution could be imminent. The granting of the export relaxation would provide much-needed relief to Freeport, allowing it to manage its inventory levels and resume normal operations.