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Freeport Questions Contract Fate

9 July 2013 00:02 WIB

TEMPO.CO, Jakarta - Rozik Sutjipto, President Director of Freeport Indonesia, asked the government to complete the company's contract of Works (CoW) renegotiation in the next three months. "This is important to determine the fate of our contract's continuation," Rozik said at the House of Representatives building last weekend.

Rozik is asking the government for a contract extension until 2041, related to the company's plan to dig underground. To date, Freeport's only covers 30 percent of its digging activity underground. In the future, all digging activities would be held underground since the company's surface mineral reserves will be depleted by 2016. The company had found new sources of ore amounting to 2.5 billion tons.

"Of the amount, 87 percent is located underground."

With the potential, Freeport will spend US$9.8 billion worth of investment. According Rozik, the funds will be used to build a 1,000-kilometer underground tunnel which will be completed in 2020, one year before the CoW expires.

"We are asking for a contract extension because the underground minerals would last until 2057," he said.

Coordinating Minister for the Economy Hatta Rajasa said the government is trying to finish discussing the contract with Freeport. According to him, Freeport still has the chance to extend its contract even though the company's smelter construction will not be completed in 2014--in accordance with the deadline set by the government.

ANGGA SUKMA WIJAYA


 



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