TEMPO.CO, Jakarta - The Energy and Natural Resource Minister has agreed to grant a permit for export of copper concentrate to PT Freeport Indonesia next week. Freeport has halted its export activities since January 12. “Freeport can resume export next week,” said Bambang Gatot Ariyono, Director General of Mineral and Coal, at the Maritime Ministry office yesterday, Feb., 14.
Bambang did not specify the export quota given to Freeport. Between August 2016 and January 2017, the company had a quota of 1.4 million tons of copper, an increase compared to that of given by the government in July 2014 at 756,000 tons.
Also read: Freeport Indonesia Halts Production
The government would allow Freeport to resume export after it grants a special mining permit (IUPK). Bambang Gatot Ariyono noted that the permit covers a mining area of 9,946.12 hectares.
Earlier, the Energy Minister secretary general Teguh Pamuji said that the provision of IUPK would entail termination of Freeport’s contract of work (CoW). The term of IUPK has been set in accordance with the remaining term of the CoW i.e. effective until 2021. “If it chooses [to switch over to] the IUPK, the CoW will be null and void. We will give it time to respond,” Teguh said.
Freeport said it was against the IUPK since the government had not met its proposed conditions. “We have yet to agree because there is no assurance of a safe investing environment,” Freeport spokesman Riza Pratama told Tempo.
The U.S.-based company pointed to the assurance of a nailed down fiscal regime, which was set forth in the existing CoW. Meanwhile, the government is planning to impose the prevailing fiscal regime on Freeport.
Freeport had also threatened to cut production to 40 percent. An Interoffice Memorandum of Freeport Indonesia received by Tempo stated that the company reported it has halted operation of its smelting plant since Friday last week. On the same day, the company sacked 25 out of 139 expatriates. The company is expected to lay off up to 30,000 of its employees following an announcement on operation halt to contractors.
Finance Minister Sri Mulyani said that there is some room for negotiation because the deadlock was not only about fiscal policy but also Freeport’s obligation to build a copper smelter and disposal of its 51 percent stake to the Indonesian government.
Freeport has so far completed 13 percent of its smelting plant construction. In addition, it has yet to agree to terms with the government on the mechanism of asset calculation. “There will be two guarantees, a guarantee for the Republic to claim its rights and a guarantee for them to create a good investment plan in both mining and downstream industry,” Sri Mulyani said in her office.
GHOIDA RAHMAH | ANTARA | ROBBY IRFANY
