Phoenix. US-based mining giant Freeport-McMoRan (FCX) has signed a memorandum of understanding with the Indonesian government to extend the operating rights of its subsidiary, Freeport Indonesia (PTFI), at the Grasberg mineral district in Papua.

The agreement secures operational certainty until the mine’s reserves are fully depleted, effectively aligning the contract with the life of the resource.

Under the MoU, the government will amend PTFI’s Special Mining Business License (IUPK) to reflect the extended operating period. In exchange, FCX will divest an additional 12% stake to the Indonesian government at no cost in 2041. Beginning in 2042, FCX’s ownership will be reduced to around 37%, with the remaining shares held by Indonesian entities.

PTFI is also committed to stepping up community development programs in Papua, including financing a new hospital and two health education facilities. The company pledged to increase exploration spending to secure long-term reserves and reaffirmed its commitment to domestic downstreaming by prioritizing local sales of refined copper, precious metals, and sulfuric acid.

FCX Chairman Richard C. Adkerson and CEO Kathleen Quirk said the company was proud of its six-decade partnership with Indonesia.  “We value our long-standing partnership with the Indonesian government, the people of Indonesia and Papua, and the mutual trust that has been built over many years. The Grasberg operations have provided substantial benefits to all stakeholders over its six-decade history, and this extension will provide opportunities to continue to build substantial value for all stakeholders in one of the world’s most significant copper and gold deposits,” they said in a joint statement.

The extension remains subject to the formal issuance of the amended IUPK by the government. PTFI said it would immediately proceed with the necessary application process under the agreed framework.

Strategic Shift in Resource Control
Located in the highlands of Mimika, Papua, the Grasberg district is one of the world’s largest and most technically challenging copper and gold mines. Since production began in the 1960s, operations have transitioned from open-pit mining to one of the largest underground mining complexes globally.

The partnership between Freeport-McMoRan and Indonesia has undergone major changes, particularly after the 2018 divestment that raised Indonesia’s ownership, through MIND ID, to 51.2%.

The 2026 deal signals a new phase in Indonesia’s push for stronger resource sovereignty. It not only locks in future majority ownership but also safeguards long-term supplies of copper, a critical material for electric vehicles and renewable energy infrastructure, supporting the country’s downstream and energy transition ambitions.