Freeport Indonesia CEO resigns after force majeure on copper exports

Sat Feb 18, 2017 4:52pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Agustinus Beo Da Costa

JAKARTA (Reuters) - Chappy Hakim, chief executive of miner Freeport-McMoran Inc's (FCX.N: Quote) Indonesian unit, has resigned, the company said on Saturday, after the parent firm declared force majeure on copper concentrate shipments from its Grasberg mine in Papua.

Freeport, which has been negotiating with the Indonesian government after halting exports due to new mining rules, said on Friday it could not meet contractual obligations for copper concentrate shipments from the giant mine following a five-week export stoppage.

All work has stopped at the mine, the world's second largest for copper, a union leader said.

Hakim, a former air force chief, had only been in the job for a few months. Freeport Indonesia hoped he would be able to use his political connections to help the firm navigate its way through a period of regulatory uncertainty.

"I have decided it is in the best interests of PTFI (Freeport Indonesia) and my family to step down from my duties as president director while continuing to support the company in an advisory role," Hakim said in a company statement.

A Freeport Indonesia spokesman said he could not confirm who Hakim's successor would be.

Freeport was the second big copper producer in a week to declare force majeure, after BHP Billiton (BLT.L: Quote) (BHP.AX: Quote) did so on Feb. 10 for Escondida in Chile, where a strike had grounded the world's largest mine.

Grasberg was expected to produce 800,000 tonnes of copper in 2017, about 3.5 percent of global supply, said Jefferies analyst Chris LaFemina. Coupled with Escondida, the mines represent some 10 percent of global supply, he said.   Continued...

Chappy Hakim speaks to reporters outside parliament in Jakarta, Indonesia December 7, 2016. REUTERS/Bernadette Christina Munthe