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 Licence (IUPK) to the Indonesian Government in June 2026. The application was filed to ensure the continuity of the company’s mining operations, which are set to expire in 2041. Responding to this, the Chairman of the Indonesian Mining and Energy Forum (IMEF), Singgih Widagdo, stated that PTFI’s application for an IUPK extension is considered a highly rational step. He explained that underground mining has characteristics vastly different from open-pit mining, particularly as the mine contains non-coal minerals. “The characteristics of large investment, technology-intensive operations, and high risk are various aspects that must be faced when conducting underground mining. It is certain that with such a large investment, PTFI must ensure the value of reserves and mineral quality through detailed exploration,” Singgih said. 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 necessitates detailed data on the mineral side to be mined, while also ensuring infrastructure for occupational safety and comfort. “Especially regarding ventilation problems, ensuring operational control with multiple automated equipment or computerised underground mining equipment means the stages from exploration to commissioning production require around 15 years,” he explained. He stated that certainty regarding the extension of the operating permit is a primary consideration to ensure that PTFI’s investment yields long-term profits. “Clearly, with such enormous capital, the certainty of the operating permit extension must be secured first. The duration of the operating permit is the most important factor in determining whether the mining investment will be profitable or not. This is the same for open-pit mines, such as coal. However, considering that mineral mines are no longer permitted to sell raw materials, the operating permit will naturally be linked to the downstream investment or smelter to be built,” he said. Singgih continued that if certainty of the permit extension is only granted near the expiry of the current licence, there is a risk to the sustainability of the company’s investment. This could certainly complicate PTFI’s efforts to develop mines in its operational areas. Fundamentally, it must be understood that logistical certainty is paramount, given the mine’s remote location. Therefore, if exploration must be conducted 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 the new mine to be opened and operated,” he concluded.