Is Freeport-McMoRan’s Agreement Binding?

On July 12, Freeport-McMoRan (FCX) announced a “Heads of Agreement” with the Indonesian government and Rio Tinto (RIO). According to Reuters, “Heads of agreements are typically non-binding. However, Indonesia’s State Owned Enterprises Minister Rini Soemarno said the agreement is binding while Rio Tinto and Freeport both said the heads of agreement is just a step and not binding.” Let’s see why the three sides could have taken a divergent stance on the agreement’s nature.