Tuesday, February 3, 2015

1) House pushes for Freeport smelter location in Papua

2) Freeport Faces Class Action Over Smelter

3) Mimika invites aviation  fuel investors
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1) House pushes for Freeport  smelter location in Papua - 
Ina Parlina and Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Tue, February 03 2015, 9:01 AM - 
The House of Representatives is pushing the government to make copper giant PT Freeport Indonesia establish its smelter in Papua, increasing concerns over whether the company will be able to complete development by 2017 when a full ban on ore exports will be implemented.

The House’s leaders brought up the Papua smelter issue during a meeting with President Joko “Jokowi” Widodo on Monday.

The House’s deputy speaker, Agus Hermanto, claimed that the President had agreed that Freeport Indonesia should build its smelter close to its mine in Papua instead of following its plan to build in Gresik, East Java.

“I say many problems will arise if the smelter is built in Gresik,” Agus said after the meeting, without elaborating.

Freeport Indonesia, a subsidiary of US-based giant miner Freeport-McMoRan Inc., is required to build a copper smelter in the country as a consequence of the 2009 Mining Law that requires mining firms to process and refine their minerals in domestic facilities.

Recently, the company said that it had signed a memorandum of understanding (MoU) to lease 80 hectares of land belonging to PT Petrokimia Gresik, located adjacent to the only copper smelter in the country, operated by PT Smelting Gresik.

The governor of Papua expressed his disappointment last week with Freeport Indonesia’s decision to choose Gresik for the US$2.3 billion-smelter location.

House speaker Setya Novanto said that building a smelter in Papua would increase Freeport Indonesia’s contribution to the country and the Papuan residents.

“The President agreed with us. Freeport has only contributed Rp 6 trillion [US$472.58 million] so far, while the government has disbursed Rp 35 trillion in special autonomy funds [for Papua],” Setya said.

Freeport Indonesia argued that it chose the location for the available supporting infrastructure. Moreover, according to Freeport Indonesia president director Maroef Sjamsoeddin, acid sulfur as waste from the copper smelter could be absorbed by Petrokimia Gresik if the smelter was built there. A similar strategy could not be taken in Papua as no fertilizer firm existed there.

Smelters built by mining firms must be completed by 2017 if the miners want to keep their businesses alive.

According to a regulation issued in January last year, the government will stop the relaxation of the ban on mineral ore exports in 2017. The full ban on mineral ore exports should have started last January. However, following concerns over massive layoffs as no smelters were ready to absorb production, the government under then president Susilo Bambang Yudhoyono issued a regulation allowing semi-finished product, such as copper concentrate produced by Freeport Indonesia, to continue be exported until 2017. After the deadline, mining firms will only be allowed to export processed metal.

Meanwhile, Energy and Mineral Resources Minister Sudirman Said told reporters after the Monday meeting that the House’s suggestion would be discussed during negotiations with the company.

“We will try hard to accommodate all interests,” Sudirman said.

Earlier, during a meeting with the House of Representatives’ Commission VII overseeing energy, Sudirman told legislators that forcing smelter development in Papua would only give Freeport Indonesia a chance to miss the 2017 deadline because development there would take more time. The ministry preferred to suggest that Freeport Indonesia contribute to the development of the downstream industry in copper to contribute to development in Papua. 

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2) Freeport Faces Class Action Over Smelter

By Tabita Diela on 10:40 pm Feb 02, 2015

Jakarta. Four activists from ProDem, an activist group, filed a citizen lawsuit against President Joko Widodo and Freeport Indonesia, the local unit of US mining giant Freeport-McMoRan, at the Central Jakarta district Court on Monday for allegedly failing to comply with the 2009 Mining Law’s requirement on domestic smelting.
The lawsuit includes a demand that could disrupt Freeport Indonesia’s production process for at least two months.

People Lawyers Union, or SPR, acted as the counsel for the four plaintiffs, namely Arief Poyuono, Kisman Latumakulita, Iwan Sumule and Haris Rusly. ProDem is a network of activists from organizations that advocate for democracy around Indonesia.
Arief, who is also the chairman of the State-owned Enterprises Labor Union, said they want the court to “cancel Freeport Indonesia’s permit extension to export concentrate for six months and its contract extension.”
The plaintiff said that based on the 2009 Mining Law, Freeport Indonesia should have had a smelter by 2014. Instead, it last month secured the export permits after renting land in East Java, on which it would build its smelter by as soon as 2018.

“The permits show there was a discrimination from the government against Indonesian businesses and corporations. Local mining companies abide by the law. So why did the government give Freeport Indonesia a privilege?” Arief said.
The plaintiffs also demanded the court  halt Freeport Indonesia’s exports or mining activities pending the lawsuit, which will take at least two months to hear.
SPR have represented several failed class actions in the past, including one that challenged then-president Susilo Bambang Yudhoyono for raising the price of subsidized fuel in 2008.
SPR also represented a class action against Freeport Indonesia in 2013, over the deaths of employees in an underground training facility accident.
Alvon Kurnia Palma, chairman of the Indonesian Legal Aid Foundation (YLBHI), said the legal complaint could potentially disrupt the production process at Freeport Indonesia.
“The court can always ask the government to stop the export activity,” Alvon said.
The vice president for corporate communications at Freeport Indonesia, Daisy Primayanti, did not respond to requests for comment.
GlobeAsia

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3) Mimika invites aviation  fuel investors
The Jakarta Post, Jayapura | Archipelago | Tue, February 03 2015, 8:30 AM - 

The Mimika regency administration in Papua is offering an investment opportunity to domestic and foreign companies to supply aviation turbine fuel (avtur) to Moses Kilangin Airport in Timika.
The administration has invited companies, including those overseas, which have permits to sell avtur, to invest in Mimika, Mimika government communication and information officer John Rettob told Antara news agency on Monday.
He said the demand for avtur at the airport was very high and continued to increase each year.
“We have provided the required land for an avtur station. Every company that wants to invest in Mimika is welcome,” John said. (***)
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