Freeport Seeks More Time to Finish Smelter Construction

TEMPO.CO, Jayapura - Rozik Soetjipto, president director of US-based miner Freeport Indonesia, said the company is struggling to complete the construction of mineral processing and refining facilities (smelters) on time. The company is mandated to build the smelter in Timika, Papua, and is expected to finalize the construction by the end of 2016.

"The problem is, the time is too short and the infrastructure must be built first," he said at the office of the Governor of Papua, yesterday, as quoted by Antara.

Rozik said Freeport will be able to finish on time if the company is allowed to build the smelter in Gresik, East Java. If the smelter has to be built in Papua, he said, Freeport require a longer deadline to seek for investors and build infrastructure support.  

According to Rozik, these difficulties have been submitted to Papua Governor Lukas Enembe.

Freeport has finalized its CoW renegotiation with the government. The company agreed to a number of requirements in order to resume its copper and gold concentrates exports.

Since January 2014, Freeport was unable to export its output due to the government-imposed progressive tax of 25 percent—related to the Law on Mineral and Coal that bans all mining companies from exporting raw minerals.

Freeport then showed its commitment to support Indonesia's domestic smelting industry by depositing a US$ 115-million cash guarantee. Freeport also agreed on new CoW and royalty contracts; allowing it to obtain a duty relief of up to 7.5 percent. The government then issued a permit to export 753,300 tons of concentrate. But, Freeport must first ship 532,000 tons of concentrate for domestic needs through PT Smelting Gresik. 

FERY FIRMANSYAH | AMIR TEJO