After nearly eight years of wrangling, Freeport-McMoran Inc. (NYSE: FCX) and the government of Indonesia have reached an agreement to allow the company to continue operating is giant Grasberg gold and copper mine.

Indonesia had insisted that Freeport could not negotiate a new license until its current license expired in 2021, a requirement the company said would cause it to scrap plans to expand its underground mining expansion. The government also wanted the company to build a copper smelter in Indonesia in order to move the country’s exports up the value chain.

In the deal announced Tuesday morning, Freeport’s Indonesian subsidiary, PT-FI, agreed to convert its current Contract of Work to a special license (IUPK) that provides the company with operating rights through 2041 with the government providing “certainty of fiscal and legal terms)” during the period.

Freeport also agreed to build a new smelter in Indonesia within five years and to divest its ownership in PT-FI so that Indonesian interests will eventually own 51% of the company’s shares. Freeport will retain control of the Grasberg operation and the governance of PT-FI.

The company already has divested 9.36% of its interests in PT-FI and will need to divest another 41.64% to meet the terms of the deal. The agreement announced today indicates that the government will pay “fair market value,” something it has long resisted, demanding instead a discount to account for unmined copper reserves.

Last year, Freeport offered a 10.64% stake in PT-FI for $1.7 billion, valuing the mine at about $16.2 billion. The government counter-offered at $630 million.

With the timing and valuation issues still unresolved, today’s agreement might best be described as only a partial solution to the long-running dispute.

The long and short of it is that Freeport gave up a lot in order to retain a stake in the world’s second-most productive gold mine and second-most productive copper mine. Grasberg’s copper reserves have been estimated at 790,000 metric tons and its gold reserves total about 25.8 million ounces of gold, according to the company.

Freeport stock traded down about 3.4% at $15.00 Tuesday morning, after closing at $15.53 on Monday. The stock’s 52-week trading range is $9.24 to $17.06. Its 12-month consensus price target is $14.92.

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