Indonesia's mine rules target all foreign companies

Freeport McMoRan Copper & Gold Inc., deputy energy and mining minister, said that the new Indonesian regulation that changes the rules on foreign ownership of mines applies to all foreign companies and is not aimed specifically  at the largest of those.

Under the rules signed by President Susilo Bambang Yudhoyono, South East Asia's largest economy will require foreign companies to sell down stakes in mines and increase domestic ownership to at least 51% by the 10th year of production.

Indonesia has substantial mineral wealth and is the world's top exporter of thermal coal and tin, but attention has focused on freeport since news of the regulation that could deter fresh investment in the sector.

Freeport is negotiating to renew its royalty contract to run the Grasberg mining complex, which has the world's largest gold reserves and is the second-largest copper mine.

Freeport started operating in Indonesia in 1967 and won its contract at Grasberg in the highlands of Papua in 1991. It currently owns about 90% of the open-pit mine, which has 33.7 million ounces of gold reserves and 32.7 billion pounds of copper. The remainder belongs to the government.