World’s Richest Mines Slipping From Hands of Multinationals

Outnumbered and outflanked, Freeport-McMoRan Inc. Chief Executive Officer Richard Adkerson made an about-face.

Only months before, Adkerson had dismissed the idea of selling a majority stake in the Phoenix-based company’s flagship Indonesian copper-and-gold mine to local investors. But, seated beside government officials in Jakarta last week, the veteran executive told reporters he planned to do just that.

“Freeport caves to govt demands” headlined The Jakarta Post while the Indonesian Energy and Mineral Resources Ministry tweeted its glee: “Freeport obedient, Indonesia is sovereign” and posted pictures of Adkerson, conspicuous in gold-and-black batik alongside triumphant local officials.

That image -- a red-faced American CEO in a tropical shirt furiously back peddling -- may come to haunt not just Adkerson but his cohort of multinational CEOs. Freeport’s loosening grip on its Indonesian crown jewel illustrates a larger challenge facing the global mining industry: In a surge of economic nationalism, local governments and unions are pushing back against Western dominance of the world’s natural resources.

“We’re seeing the rise of more nationalistic governments everywhere,” said Paul Mitchell, a partner at Ernst & Young’s mining and metals practice. “That desire to hold the assets of a nation and work on them themselves, I think is only going to rise as we realize they’re becoming scarce, and are only going to become more scarce.”