Wednesday, February 4, 2015

1) Papuan students rally against Freeport smelter plans

2) Freeport’s lack of commitment
1) Papuan students rally against Freeport smelter plans - 
Andi Hajramurni, The Jakarta Post, Makassar | Archipelago | Wed, February 04 2015, 8:01 PM -
Mining giant PT Freeport Indonesia’s plan to develop a smelter to process mineral ore in Gresik, East Java, has led to a protest being staged by Papuan students in Makassar, South Sulawesi.
Fifty members of the Solidarity Forum of Papuan Students and Communities staged a rally to protest the smelter construction from the Mandala Monument to a nearby overpass in Makassar on Wednesday.
In their speeches, the protesters firmly rejected Freeport’s plan to build a smelter in Gresik, saying that local communities in Papua should benefit from their natural resources and enjoy improved prosperity from the wealth.
“Freeport’s plan to build a smelter in East Java will result in people there enjoying the benefits while in contrast it will inflict losses on us as Papuans. Therefore, we firmly reject this plan,” said Suarek Malik, the rally coordinator.
He said Freeport should uphold Law No.11/1967 on mining, which stipulates people’s rights in the case of land being converted into mining areas, by developing a smelter in the area and employing Papuans in the facility.
In the rally, the students also expressed support for Papua Governor Lukas Enembe in his rejection of Freeport’s smelter construction plan, saying it would bring losses to Papuan communities.
“The results of Papua’s natural resources must benefit Papuans, not those from other regions,” said Suarek.
The students also protested the fact that Papua seemed to be overlooked in industrial development. They said the government should prioritize industrial development in Papua also so that the territory could enjoy progress in development and eventually improved livelihoods for its people.
Suarek said the students urged President Joko “Jokowi” Widodo to stop Freeport building its smelter outside of Papua.
“The President must assert that the smelter can only be constructed in Papua,” he said.
President Jokowi should also enforce Article 25 of Law No.4/2009 on minerals and coal, which prohibited the exportation of raw mineral ores, he added. (ebf)(++++)
2) Freeport’s lack of commitment
The Jakarta Post | Editorial | Wed, February 04 2015, 10:05 AM - 
PT Freeport Indonesia, a subsidiary of US-based mining giant Freeport-McMoRan Inc., deserves a strong rebuke from the government and the House of Representatives for its utter lack of commitment to developing a copper smelter to comply with the 2009 Mining Law.

The government had compromised in early 2014 by lowering the purity levels of copper, nickel, bauxite and other minerals to fall below those stipulated in the law to allow them to continue mineral exports after the 2014 deadline for the ban of unprocessed mineral exports.

The compromise was meant to prevent substantial worker layoffs and sudden falls in export earnings and state revenues for the central and regional governments, from royalties and other taxes. 

But the export permit, issued during the transition period until 2017 when a total ban will be slapped on unprocessed minerals, is tied to higher export taxes of 20 to 60 percent, royalty payments and clear timetables for the development of smelters in the country.

So far, Papua-based Freeport Indonesia, the largest producer of copper and gold in the country, has failed to show any concrete progress in the development of its US$2.3 billion smelter project with an annual capacity of two million tons. 

The company only reached a memorandum of understanding with state-owned PT Petrokimia Gresik on its plan to lease an 80-hectare plot of land in Gresik, East Java, for the plant project.

It is rather impossible for Freeport to complete the plant within the next three years, as the required feasibility study has yet to be made and dozens of other permits have yet to be obtained from the central and local governments.

The House was especially irked by Freeport’s plan to build its smelter in the Petrokimia Gresik industrial complex in East Java, a corporate action seen as ignoring the interests of the Papuan people. 

But Freeport’s plan is understandably more commercially viable because the smelter project requires at least 600 megawatts of power and other supporting infrastructure that is unavailable in Papua. Gresik can easily fulfill those requirements. Petrokimia Gresik can also process sulfuric acid, a byproduct of the smelter.

The government should be forceful in ensuring that Freeport develops its smelter, but given the tight schedule, the company could be allowed to go ahead with its original plan to build the smelter in Gresik but with stricter timetables for each stage of construction and much higher export tax, as stipulated in the January 2014 regulation. 

Freeport-McMoRan has a big stake in Papua as its Indonesia concession holds 30 billion pounds of proven and probable copper, 29.8 million ounces of gold and 308.5 million ounces of silver. Its mining operations in Papua have been highly profitable due to low (open pit) mining costs.

Hence, the only alternative for Freeport is pushing ahead with the smelter project, otherwise it will lose those huge mineral reserves if its mining license is not renewed after 2021. -


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