Govt Wants Freeport to Divest 30%
8 April 2014 12:46 WIB
TEMPO.CO, Jakarta - R. Sukhyar, director general of mineral and coal at the Ministry of Energy and Mineral Resources, said that the government and PT Freeport Indonesia will soon agree on divesting 30 percent of the company's shares. "It's almost a deal. Why wouldn't [Freeport] agree—they have been here for decades," Sukhyar said yesterday.
Sukhyar said that 30 percent is a lower figure than what was set in Government Regulation No.24/2012, which says that foreign companies with mining permits must divest 51 percent of their shares after five years of production. However, the 51-percent is considered as the maximum limit.
"It depends on the investment. Freeport will develop underground mines in Indonesia. This requires investments, intangible assets, and expertise," he said.
With this discussion, Freeport's contract of work (COW) renegotiation is almost completed. The company also agreed to pay royalties in accordance with the new provisions. As for area size, Sukhyar said Freeport only needs 10,000 hectares to exploit. Law No.4/2009 on Mineral and Coal regulates that the minimum mining concession is 25,000 hectares.
Responding to the government's statement, Freeport was unwilling to assert its position just yet. Freeport's vice president of corporate communications Daisy Primayanti said the company has yet to set a deal with the government about the divestment. "Discussions are still taking place," she said, promising to provide information as soon as an agreement is reached.
BERNADETTE CHRISTINA MUNTHE | PINGIT ARIA