Phoenix AZ – February 19, 2026 | By STAFF HERE PHOENIX WRITER
WHAT’S HAPPENING
What did Freeport-McMoRan and the Indonesian government agree to on February 19, 2026?
They signed an MOU extending operating rights for PT Freeport Indonesia’s Grasberg minerals district beyond 2041, ensuring the life of resource operations.
How will Freeport-McMoRan’s ownership in PTFI change after 2041?
Freeport-McMoRan’s stake will decrease from 48.76% to approximately 37% after a 12% share transfers to Indonesian government interests at no cost in 2042.
What are PTFI’s community development commitments under the MOU?
PTFI will increase community support in Papua, including financial assistance for a new hospital and two medical education facilities.
What is the significance of the Grasberg minerals district?
It is one of the world’s largest copper and gold deposits, contributing approximately 3% to global copper output.
Phoenix-based Freeport-McMoRan has secured an extension for its operating rights at the Grasberg minerals district in Indonesia through a Memorandum of Understanding signed on February 19, 2026. The agreement, crucial for Arizona’s economy, extends operations beyond 2041 and outlines new community development commitments and potential copper supply terms for the U.S.
Freeport-McMoRan Secures Extended Operating Rights for Grasberg Mine in Indonesia
Phoenix-based Freeport-McMoRan (NYSE: FCX) announced on February 19, 2026, the signing of a Memorandum of Understanding (MOU) with the Indonesian government, granting a life of resource extension for the operating rights of PT Freeport Indonesia (PTFI) in the Grasberg minerals district. This agreement reinforces Freeport-McMoRan’s long-term presence in a globally significant mining region and is expected to impact its future financial outlook and the supply of copper to the United States.
Key Details of the Grasberg Extension Agreement
The MOU outlines terms for amending PTFI’s special mining business license (IUPK) to permit operations beyond its current expiration in 2041, extending for the life of the resource. Under the terms of this arrangement, Freeport-McMoRan will maintain its 48.76% ownership interest in PTFI through 2041. Subsequently, a 12% share will be transferred to Indonesian government interests at no cost, reducing Freeport-McMoRan’s stake to approximately 37% from 2042 onward. The acquiring party will, however, reimburse Freeport-McMoRan for its pro-rata costs incurred for investments that benefit the post-2041 period, based on book value. The agreement ensures the continuity of the existing governance and operating structures and terms of the current shareholder agreement and IUPK.
Community and Economic Development Commitments
As part of the MOU, PTFI has committed to increasing community support in Papua. This includes providing financial assistance for a new hospital and two medical educational facilities. Furthermore, PTFI plans to increase exploration spending and advance studies to identify and develop long-term resources and potential expansion opportunities within the Grasberg district. The agreement also prioritizes domestic processing of copper and other minerals, with PTFI positioned to potentially supply refined copper to the United States on market terms if additional supplies are required.
Significance of the Grasberg Minerals District
The Grasberg minerals district, located in the remote highlands of Central Papua province, Indonesia, is recognized as one of the world’s largest copper and gold deposits. It accounts for approximately 3% of global copper output, making it a crucial contributor to the international supply chain. Freeport-McMoRan operates substantial copper, gold, and molybdenum assets globally, with Grasberg being a cornerstone asset. The extension of these operating rights secures long-term access to these valuable resources.
Future Outlook and Market Impact
This extension agreement provides certainty for long-term capital planning and reflects Indonesia’s evolving strategic resource control mechanisms. It aligns with broader regional trends towards increased state control over natural resources amid growing global demand for critical minerals. Freeport-McMoRan had previously reported financial resilience despite operational disruptions at Grasberg in late 2025, with a focus on restoring operations safely and sustainably. The company’s 2026 consolidated sales outlook assumes a phased restart of the Grasberg Block Cave, with approximately 85% of total production at normal operating rates expected to be restored in the second half of 2026. Growth in sectors such as artificial intelligence and defense is projected to increase global copper demand significantly by 2040.
Summary of Grasberg Extension Agreement Features
| Feature | Description |
|---|---|
| Agreement Date | February 19, 2026 |
| Parties Involved | Freeport-McMoRan (PT Freeport Indonesia) and Indonesian Government |
| Extension Type | Life of resource extension for operating rights |
| Previous Expiration | Operating rights previously valid until 2041 |
| FCX Ownership (through 2041) | 48.76% in PTFI |
| FCX Ownership (from 2042) | Approximately 37% in PTFI after 12% transfer |
| Community Support | Increased financial backing for a new hospital and two medical education facilities in Papua |
| Exploration & Development | Increased spending and studies for long-term resources and expansion |
| Domestic Processing | Continued prioritization of domestic downstreaming of copper and other minerals |
| U.S. Copper Supply | Positioned to broaden marketing of refined copper to the U.S. if needed |
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Author: STAFF HERE PHOENIX WRITER
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