Why Freeport is Requesting an IUPK Extension Beyond 2041
Freeport-McMoRan (FCX) has disclosed that PT Freeport Indonesia (PTFI) submitted an application for an extension of its Special Mining Business Permit (IUPK) to the Indonesian Government in June 2026. The application was filed to ensure the continuity of the company’s mining operations, which are due to end in 2041.
Responding to the matter, the Chairman of the Indonesian Mining and Energy Forum (IMEF), Singgih Widagdo, said that PTFI’s application for an IUPK extension is a highly rational step. This is because underground mines have very different characteristics from open-pit mines. Moreover, the mine contains non-coal minerals.
“The characteristics of large investment, technology-intensive operations and high risk are among the challenges that must be faced in underground mining. It can be assured that with such a large investment, PTFI must certainly confirm the reserve value and mineral quality through detailed exploration,” Singgih said when contacted by CNBC Indonesia on Wednesday (5/8/2026).
Beyond exploration, Singgih noted that underground mine development also requires the implementation of high precision technology. The high precision technology to be used for underground mining will certainly require detailed data on the mineral side to be mined, while also ensuring infrastructure for safety and comfort at work.
“Moreover, with regard to ventilation problems, ensuring operational control with multiple automated or computerised underground mining equipment, the stages from exploration to commissioning production take around 15 years,” he explained.
He said that certainty over the extension of the operating permit is a primary consideration in ensuring that the investment made by PTFI yields long-term profits.
“Clearly, with such a very large capital outlay, certainty over the extension of the operating permit must be secured first. The length of the operating permit is the most important factor in ensuring whether a mining investment will be profitable or not. This also applies to open-pit mines, such as coal. However, given that mineral mines are no longer permitted to sell raw material, the operating permit will certainly be linked to investment in the downstream side or the smelter to be built,” he said.
Singgih continued that if certainty over the permit extension is only granted close to the expiry of the current permit, there is a risk to the sustainability of the company’s investment. This would certainly make it difficult for PTFI to develop mines in its operating areas.
Fundamentally, it must first be understood that logistical certainty is the most important factor. This is because the mine location is in a remote area. Therefore, if exploration must be carried out to open a new mine in the area, permit certainty must be obtained well in advance.
“Moreover, investors must involve and utilise lenders or banks (both national and international) in financing a new mine that will be opened and operated,” he concluded.