TEMPO.CO, Surabaya - The central government has not yet reached an agreement with PT Freeport following the issuance of a new bill. Energy and Mineral Resources Minister Ignasius Jonan offered three options to the US-based mining company.
"We gave [Freeport] six months for negotiations," Jonan said after giving a public lecture at Airlangga University in Surabaya on Thursday, February 23, 2017.
The first option is to urge Freeport to comply with existing regulations while sitting in negotiations on investment stability. The second option is to amend the Law on Mineral and Coal. The last one is to settle the dispute in an international arbitration.
However, Freeport refused the options, as they viewed that the shift from the contract of works (KK) to special mining license (IUPK) would threaten their business sustainability. Freeport planned to file a lawsuit against the government with arbitration if the solution to the dispute remains deadlocked.
In response to the threat, Jonan insisted on the three options.
"There were three options at that time. If they don’t like them, they are welcomed to discuss them with the parliament or us to discuss an amendment to the Law on Mineral and Coal. Or, they can take it to arbitration," Jonan said.
Jonan added that the government is ready to face the lawsuit.
"We're not only ready, but we can also take this case to arbitration," Jonan added.
Jonan asserted that the shift from the contract of works to the special mining license is not an obligation. Contract holders are allowed to maintain their contracts provided that they comply with Law No. 4/2009 on mineral and coal mining.
"We don't force [miners to shift to the IUPK]. For instance, PT Vale remains a contract of works holder, but they follow the rules," Jonan explained.
Contract holders are required to build smelters within five years as mandated in Article 170 of the Law on Mineral and Coal.
"It's already been three years. If there's still time, [miners] must immediately shift from contract of works to special mining license,” Jonan said.
ARTIKA RACHMI FARMITA
