Tuesday, January 26, 2016

1) Freeport questions Indonesia’s demand for smelter deposit

2) Gov`t to Build Optic Cable Network in Papua
1) Freeport questions Indonesia’s demand for smelter deposit
Indonesia's demand that Freeport McMoRan Inc pay a deposit for a new smelter to continue exporting copper concentrate is "inconsistent" with an agreement reached between the two sides in mid-2014, the firm's CEO said on Tuesday.
Indonesia's government has said the U.S. mining giant must provide a $530 million deposit by Thursday to prevent a possible halt in copper concentrate exports from its massive Grasberg mine in the province of Papua.
A halt in exports would deal a blow to Freeport's profits and deny the Indonesian government desperately needed revenueicon1.png from one of the country's biggest taxpayers. It would also buoy global prices of the metal that have slipped 6 percent so far this year on worries over a glut.
The U.S. firm's six-month export permit for its Indonesian unit is due to expire on Thursday, said Didi Sumedi, an official at the trade ministry, correcting a statement earlier this week that said the deadline was Tuesday.
"Certain officials with the ministry of energy and mines have suggested that we should continue to pay an export duty and that we should make a sizeable escrow deposit to support the smelter development," Freeport CEOicon1.png Richard Adkerson said on a call following the announcement of its Q4 financial results.
"These points are inconsistent with the arrangements that we had worked with the government in mid-2014."
Those agreements said Freeport must sell the government a greater share of the Grasberg copper and gold mine and invest in domestic processing to win an extension of its contract beyond 2021.
Adkerson said discussions with the government were ongoing, and he was confident a new export license would be issued.
Jakarta wants the $530-million deposit as a guarantee that the Phoenix, Arizona-based company will complete construction of another local smelter. The amount would add to an estimated $80 million that Freeport set aside in July to obtain its current export permit. 
Freeport, under pressure from activist investor Carl Icahn, has struggled to reduce its $20.7 billion of debt and announced in October it would cut production globally. 
Usually, Freeport Indonesia produces about 220,000 tonnes of copper ore per day. About a third usually goes to its domestic smelter at Gresik, with the rest exported as concentrate.
"It is unlikely for Freeport to not pay that deposit, they certainly want to export so they will negotiate," said Helen Lau, analyst at Argonaut Securities in Hong Kong. 
A prolonged interruption to the Papua mine would affect about 24,000 people working at Grasberg, potentially leading to unrest in a region where Indonesia's government is trying to increase economic activity.
(Additional reporting by Fergus Jensen and Michael Taylor in Jakarta, Manolo Serapio in Singapore, and Nicole Mordant in Vancouver; Writing by Randy Fabi; Editing by Himani Sarkar and Katharine Houreld)

TUESDAY, 26 JANUARY, 2016 | 14:50 WIB
2) Gov`t to Build Optic Cable Network in Papua

TEMPO.COJakarta - The Communications and Informatics Ministry has announced winners of Palapa Ring tender for west and central packages while the tender for east package is still in process. Fiber optic network for east package will cover East Nusa Tenggara, Maluku, West Papua and Papua regions. The total length of the fiber optic cable is around 6,300 kilometers.
Communications and Informatics Minister Rudiantara said the biggest challenge for the east package is the inadequacy of transportation network in 20 rural areas in Papua. “But we will find a way,” he said on Tuesday, January 26, 2016.
According to Rudiantara, President Joko Widodo has instructed the Public Works and Public Housing Ministry to build roads in Papua. “We will ride on that project to install optic cables,” he said.
Last week, the Communications and Informatics Ministry has announced Palapa Ring tender winners for west and central regions worth US$230.64 million or around Rp31 trillion. The project is targeted to complete in late 2018 and begin operating in January 2019.
West package is won by Moratel-Triasmitra Consortium which consists of PT Moratelematika Indonesia with 90 percent and PT Ketrosden Triasmitra with 10 percent. This package covers Riau and Riau Islands with total cable length up tp 2,000 kilometers.
Central package is won by Pandawa Lima consortium which consists of PT LEN (51 percent), PT Teknologi Riset Global Investama (34 percent), PT Sufia Technologies (5 percent), PT Bina Nusantara Perkasa (5 percent) and PT Multi Kontrol Nusantara (5 percent). This package covers Kalimantan, Sulawesi and North Maluku with total cable length up to 2,700 kilometers.
Rudiantara said Palapa Ring will serve non-financially feasible regions for even telecommunication infrastructure and the government will provide guarantees up to 15 years for that.
Palapa Ring project will be implemented with Government-Enterprises Cooperation (KPBU) scheme which is based on Presidential Decree No. 38/2015 on Government Cooperation with Enterprises in Infrastructure Provision.

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