I don't understand the issue here with the letters of credit as it seems that it would relatively easy to resolve. But the end results is another disurption of copper supplies - there sure have been a lot of them lately.

Taken from: http://www.mining.com/freeport-cancels-copper-exports-from-indonesia-as-permit-expires/

Freeport-McMoRan Inc. (NYSE:FCX), the largest publically traded copper producer, has stopped exports from its Grasberg mine in Indonesia after failing to obtain an exemption from a new rule requiring mining exports to use letters of credit.

The shipments have halted since last month, the Jakarta Globe reported, adding that Indonesian authorities had earlier exempted the firm from the rule for six months, but that permit expired on July 25.

On Monday the company, the U.S. largest miner by market value and revenue, announced it might issue up to $1 billion in common shares. The move aims to help the miner come to grips with a hefty debt load following its $9 billion acquisition of Plains Exploration in 2013.

Despite the short rally following the news, the miner’s stock has fallen over 70% in the past year, and it was trading 2.15% lower to $9.98 in New York at 10:05am ET.

P.S. I looked up what the letters of credit are: http://www.howtoexportimport.com/How-does-Letter-of-Credit-work--36.aspx

Mechanism of Letter of Credit

LC is a common term used in all trade. When talking of LC, there may have many questions among traders. What is Letter of Credit? How does Letter of Credit work? How many types of LC are there? How do these types of Letter of Credit work? Which type of Letter of credit is safe for Exporter? Which type of LC is safe for Importer? How to provide credit period to buyer under Letter of Credit? Can we get my products immediately up on shipping goods under Letter of Credit?

What is Letter of Credit?

Letter of credit is an assurance given by the buyer’s bank to remit the amount to the seller through seller’s bank on maturity, as per the terms and conditions of document based on the contractual agreement between buyer and seller. Now in simple words, If LC opened on your name as beneficiary, you will receive amount though the buyer’s bank (opening bank) on the agreed time. All Letters of Credit for export import trade is handled under the guidelines of Uniform Customs and Pracice of Documentary Credit of International Chamber of Commerce (UCP 600). I know, the above explenation about Letter of Credit is not perfect. So I request you to read all articles about Letter of Credit in this web blog.

There are various types of letters of credit like Revocable, Irrevocable, Confirmed, Unconfirmed, Clean & Documentary, Fixed, Revolving, Transferable, Back to Back etc. Most common and safe LC is Irrevocable Letter of Credit for both buyer and seller.

You can go through details about all types of LC in another article in same website. Also written a seperate artilce about parties involved in Letter of credit.

When can exporter get money under LC?

As per the agreed terms between buyer and seller, the period of credit is decided. Based on such period of credit, the time to effect payment by opening bank (buyer’s bank) is determined.

What is Sight LC and how does LC at sight work?

Now let us discuss the mechanism of working LC at sight. How does sight letter of credit work?

Procedures to get money under Letter of Credit at sight.

Opening a Letter of Credit at sight is common practice in the export business. Under sight LC, the payment of export proceeds sent to seller’s bank by buyer’s bank immediately up on receipt of original shipping documents as per the terms and conditions mentioned on LC.

Once after completion of export customs clearance procedures, the exporter prepares all required documents as per the terms and conditions of letter of credit. These documents will be submitted with exporter’s bank, along with the original LC. Bank verifies all documents and make sure, the documentation is in order as per LC conditions. These documents will be sent to buyer’s bank and in turn to the buyer after necessary approval in documentation by seller’s bank. Once the buyer’s bank receives the documents, the export sales amount as per the said documents will be sent to exporter’s bank. However, the documentation of each consignment must be as per the conditions of LC at sight and the buyer’s bank has the right to reject payment on any violation of such documentation. This is the procedures under letter of credit at sight.