Government, Freeport Agree on 4 Points

TEMPO.CO, Jakarta - Rozik B. Soetjipto, President Director of PT Freeport Indonesia said his company and the government had agreed on four points set forth in the Memorandum of Understanding (MoU). The deal was signed at the Mineral and Coal Directorate General of the Energy and Mineral Resources Ministry, Friday.

"The agreement points had been discussed long ago since Chairul Tanjung was appointed the coordinating economic minister, and they were made to bridge the dialog with the Indonesian government," Rozik told Tempo yesterday.

The first point agreed by both parties is that Freeport was committed to continue the mining contract amendment that has been discussed since 2012. The second point is that Freeport was ready to comply with the government regulation regarding the export duty. Third point would be Freeport was also ready to pay US$115-million guarantee money to build a smelter in Gresik. The last point agreed is that Freeport was ready to pay the amount of the royalties based on the government regulation number 45/2003 regarding tariffs for non-tax state revenues from the energy sector.

Energy analyst at Universitas Surya Darmawan Prasodjo appreciated the agreement results between the government and Freeport, since the MoU would allow the government to boost improvement of mining sectors’ downstream industry and to realize the concept of just energy sector management.

However, Darmawan warned that the MoU is not a contract or binding and enforceable agreement. "Freeport’s commitment to implement the agreement in the future must be watched."

RAYMUNDUS RIKANG R.W