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Govt Prepares Scheme for State Income from Freeport  

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29 August 2017 17:02 WIB

Indonesia's Finance Minister Sri Mulyani Indrawati (C), Freeport McMoRan Chief Executive Officer Richard Adkerson (L) and Indonesia's Energy and Mineral Resources Minister Ignasius Jonan chat before the start of a news conference at the Ministry of Energy and Mineral Resources in Jakarta, August 29, 2017. REUTERS/Darren Whiteside

TEMPO.CO, Jakarta - The government will soon formulate a state revenue scheme from Freeport Indonesia. The scheme will be designed after the government meets and the US-based miner reaches an agreement in the negotiations over its mining contract.

One of the points to agree on is the increase in state revenues contributed by the mining company.

"[Future] state revenue from Freeport Indonesia's operations must be greater than what we received through the Contract of Work," Finance Minister Sri Mulyani said in a press conference in Jakarta, Tuesday, August 29.

Read: Minister Luhut Dubs US being Arrogant over Freeport

Sri Mulyani did not elaborate on the composition, percentage, and amount of state income, saying that there are other elements to be taken into accounts such as Non-Tax State Revenues (PNBP), royalties, and taxes.

Details of the scheme, said Sri Mulyani, will be attached to the Special Mining Business License granted to Freeport Indonesia.

Read: Divestment of 51 Percent Stake in Freeport Non-negotiatble: Luhut

In addition to state revenues, another agreement that needs to be reached is the 51-percent divestment of Freeport Indonesia's shares for national ownership. Energy and Mineral Resources Minister Ignatius Jonan said the government is currently negotiating the details of the stages and timing of the divestment.

Jonan said that the divestment scheme will also be attached to the Special Mining Business License granted to Freeport Indonesia.

The next agreement is related the construction of smelter by Freeport Indonesia within five years after the IUPK is issued, or no later than 2022—unless a force majeure happened within said period.  

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