Word: indonesia
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...hand-washes-the-other world of "Jim-Bob" Moffett, a former University of Texas football star, geologist and amateur Elvis-impersonator who built Freeport into a mining behemoth with annual revenues of almost $2 billion. Moffett himself is an F.O.S., or friend of Suharto, the ousted dictator of Indonesia, a country that is now a fuse in search of a match. An often violent election campaign leads up to voting on June 7 that could bring to power reformers long critical of Freeport...
...Indonesia is the site of Freeport's most important asset, the Grasberg open-pit mine, developed under the auspices of the Suharto regime. A giant crater scooped out of a mountainside in the jungles of Irian Jaya, on the Indonesian half of the island of New Guinea, the $60 billion mother lode contains one of the world's largest single deposits of copper and gold...
...since Suharto's ouster a year ago, Freeport's future in Indonesia has been called into question. The company's status and the allocation of its royalty payments have become a campaign issue. The company has denied any illegal behavior and notes that as one of Indonesia largest taxpayers, "it would be unusual if [we] did not maintain a close business relationship with the government of Indonesia and its officials, including then President Suharto." Fair enough, but in April, Standard & Poor's lowered its rating on $3.3 billion worth of Freeport debt and preferred stock, citing the firm's ties...
...statement to TIME, Freeport argues that its stock is "significantly undervalued," in part because Wall Street has misread Indonesia's political mood. Freeport notes it will reduce debt $200 million in 1999, and has received permission to boost ore production at Grasberg from 220,000 tons a day to 300,000 tons in exchange for doubling its royalty payments to the government...
Realistically, Indonesia needs the mine to keep operating, both for the local economy and to keep dollars coming into the country. The company spends roughly 1% of its gross revenues on housing, health care and education. Even leading politicians who once called for expelling the company now say they recognize that driving out foreign capital would harm efforts to revive Indonesia's battered economy...