Freeport's Special Mining License Extended for the Life of the Mine, Experts Explain Why
Jakarta, CNBC Indonesia - The Indonesian government will extend PT Freeport Indonesia’s Special Mining Business Licence (IUPK) beyond 2041 to cover the life of the mining resources. This has been agreed through a Memorandum of Understanding (MoU) signed between the Indonesian Government, Freeport-McMoRan (FCX) and PT Freeport Indonesia (PTFI) in Washington, DC, United States, on Wednesday, 18 February 2026.
Behind the extension for the life of the mining resources lies consideration of the complexity and sophistication required for the Grasberg copper mine in Tembagapura, Mimika Regency, Central Papua. Irwandy Arif, Chairman of the Indonesia Mining Institute, says the extension is granted due to the mining process’s complexity and the need for advanced technology that Indonesia does not yet possess.
As is known, the Grasberg copper mine being exploited today is an underground mine, having shifted from an open-pit mine. For underground mining, technology is required to replace the role of human miners. “In terms of the extension for the life of the reserves, this case at PTFI is very delicate, special, because from open-pit mining, it has moved to underground, since the open-pit reserves are exhausted. There are difficult aspects; there are easy aspects, and there are some that are very heavy. The heaviest are the underground mines, where workers are not allowed in, and only technology without people is allowed. We do not yet have this technology,” he said at the CNBC Indonesia Mining Forum on Friday, 6 March 2026.
“Mining is not only technical, but also about reserves, and so on,” he added.
“So this decision aligns with one of the Ministers’ regulations: if downstream processing is pursued and extension is possible, I think this is a Government Regulation applied between PTFI and the Indonesian Government. I think this has been studied in depth because there is an additional 12% share for Indonesia,” he explained.
It should be noted that within the MoU between the Indonesian Government, FCX and PTFI, there are several key points, namely:
PT Freeport Indonesia’s Special Mining Licence (IUPK) will be amended to extend the operating rights over the resources.
PTFI will increase support for communities in Papua, including financial support for a new hospital and two medical education facilities.
PTFI will increase exploration expenditures and continuation studies to identify and develop long-term resources and expansion opportunities.
PTFI will prioritise domestic downstream by selling locally refined copper, precious metals, sulphuric acid, and other products. PTFI will also be positioned to expand refined copper marketing to the United States, subject to market conditions, if the US requires additional copper supply.
FCX, in 2041, will transfer 12% of its shares in PTFI to the Indonesian Government at no cost, provided the acquirer reimburses FCX’s pro‑rata costs incurred for post‑2041 investments; FCX will maintain its current ownership of 48.76% in PTFI until 2041 and hold around 37% from 2042.
The governance and operating structure in place, and the terms of existing shareholders’ agreements, IUPK and other applicable agreements will continue to operate for the resource life.
Chairman of Freeport-McMoRan, Richard C. Adkerson, and FCX President and Chief Executive Officer Kathleen Quirk expressed appreciation for the long-term partnership with the Indonesian Government. They asserted that the mine’s extension would provide opportunities to continue creating substantial value for all stakeholders.
“Operations at Grasberg have delivered substantial benefits to all stakeholders over its six decades of history, and this extension will provide opportunities to continue creating substantial value for all stakeholders at one of the world’s most significant copper and gold deposits,” they said in a joint statement, quoted Thursday, 19 February 2026.
Concluding their remarks, PTFI stated that the extension of operating rights and other provisions has been agreed to follow the issuance of a revised IUPK by the Indonesian Government. PTFI intends to complete the extension submission process promptly in line with the agreed requirements.