ASIATODAY.ID, JAKARTA – Minister of Investment/Head of the Indonesian Investment Coordinating Board, Bahlil Lahadalia, revealed that the acceleration of PT Freeport Indonesia’s special mining business permit (IUPK) contract is still waiting for the mining company to determine the location of the new smelter.
Bahlil stated that the contract was almost complete, but there were several technical issues related to Freeport’s commitment to fulfilling the conditions set by the government. One of them is accelerating the realization of smelters and determining the location of new smelters in Papua.
“First, is accelerating the realization of their smelter and they must immediately determine a place in Papua for their new smelter,” said Bahlil after the opening of the 2023 National Investment Coordination Meeting in Jakarta, Thursday, December 7 2023.
Bahlil said that the government hopes that Freeport can collaborate with Papuan entrepreneurs to accelerate the prosperity of the province.
Freeport’s IUPK is scheduled to expire in 2041, and the government has set a number of conditions, including increasing Indonesian share ownership via MIND ID by 10 percent, bringing the total to 61 percent. Apart from that, Freeport is required to build a new smelter in the Fakfak Integrated Area, West Papua.
Bahlil revealed the government’s plans to extend the contract with Freeport, considering that the copper mine’s production will reach its peak in 2035.
“Now we just think strategically, Freeport’s production will reach its peak in 2035. If there is no certainty about the extension, then there will be no exploration, meaning it will be finished in 2040,” said Bahlil.
Regarding the determination of operatorship, Bahlil stated that this matter was still under discussion, with an emphasis on transparency in the structuring of financial reports as the most important thing.
“What is important is the arrangement of financial reports and transparency, because what is important for us is adding value, state income, and how mine management can run well,” he added.
Separately, the Supreme Audit Agency (BPK) said that PT Freeport Indonesia (PTFI) experienced delays in building a metal mineral refining facility (smelter) in accordance with regulations. Freeport has the potential to be subject to administrative fines of up to 7.77 trillion rupiah.
PTFI President Director Tony Wenas, when accompanying the visit of the trade minister on November 28, admitted that he was optimistic that PTFI’s second smelter would start operating at the end of May 2024 and gradually ramp up full production until December 2024. (AT Network)
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