Thursday, 20 February 2020

Freeport Resumes Mineral Concentrate Exports

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  • PT Freeport Indonesia (PTFI) spokesman, Riza Pratama. TEMPO/Nita Dian

    PT Freeport Indonesia (PTFI) spokesman, Riza Pratama. TEMPO/Nita Dian

    TEMPO.CO, Jakarta - The Energy and Mineral Resources Ministry has allowed PT Freeport Indonesia to resume mineral concentrate exports despite the lack of agreement on its regulations. Negotiation on the construction of a smelting facility is also ongoing.

    "In the discussion on long-term [benefits], the point being talked about was investment stability, the continuity of Freeport's operations, divestment, and smelter construction," the Energy Ministry secretary-general Mohamad Teguh Pamuji said in Jakarta on Tuesday, April 4, 2017.

    The Energy and Mineral Resources Minister Regulation No. 5/2017 states that mining companies are required submit plans for smelter construction before being allowed to export mineral concentrates. The ministry will appoint an independent auditor to examine the construction. Less than 90 percent completion would entail revocation of export recommendation.

    The ministry said that, despite pending agreement, Freeport is committed to establishing a smelter. The smelting plant is located in the city of Gresik, East Java, with an annual production capacity of 2 million tons. The project cost USD 2.1 billion. The construction, however, is only 14 percent complete. Freeport’s promise to commence construction in June 2016 failed to materialize.

    An export recommendation for Freeport was issued on February 17, 2017. The ministry has allowed Freeport to export 1.13 million tons of mineral concentrates per year. The recommendation was given following the issuance of a special mining business permit (IUPK) to Freeport.

    Freeport, however, has yet to apply for an export permit with the Trade Ministry. Because the company has yet to agree on the IUPK without legal and fiscal certainty equal to that of contained in the contract of work. Freeport Indonesia spokesman Riza Pratama declined to comment on the resumption of export. Riza said that negotiation with the government is ongoing. "We continue to negotiate and it's going well," Riza said.