1) Freeport Indonesia ‘adjusting’ to new regulation
Fedina S. Sundaryani The Jakarta Post
Jakarta | Fri, January 27, 2017| 04:45 pm
Major gold and copper miner Freeport Indonesia is currently reviewing the government’s newest set of regulations that allow the continued exportation of certain minerals in exchange for a contract conversion and a commitment to build a smelter.
Freeport Indonesia president director Chappy Hakim guaranteed that the firm, a subsidiary of US giant Freeport McMoRan, would comply with the fourth revision of Government Regulation No. 23/2010 on the management of mineral and coal businesses, and other relevant regulations.
“Since the government regulation has just been issued, Freeport Indonesia is currently trying to reposition itself to see how it can continue to survive. However, this means we cannot give anymore explanations [about the issue] as the process has not been completed,” he said during a seminar on the firm’s business strategies at the University of Indonesia (UI) in Depok, West Java, on Friday.
Under the latest government regulation and subsequent energy and mineral resources ministerial decrees, Freeport Indonesia is obligated to agree to have its contract of work (CoW) converted into a special mining permit (IUPK) if it wants to continue exporting copper concentrate for the next five years.
Furthermore, the regulation stipulates that the firm must also build a smelter by the end of the five years, and the progress will be evaluated by the government every six months.
Moreover, Freeport Indonesia must immediately divest 51 percent of its shares to the state, or other relevant institutions and enterprises, instead of the 30 percent it was originally obligated to divest. (hwa)
Papua urges US miner to pay $376M in taxes, penalties
pdated 1:57 am, Friday, January 27, 2017
JAKARTA, Indonesia (AP) — The governor of Indonesia's easternmost province of Papua is urging Freeport to immediately pay $376 million in taxes and penalties after a court ruled against the U.S. mining giant in a water use case.
Lukas Enembe said Friday that the Tax Court ruled Jan. 17 that Freeport should pay much higher taxes on water the company drew from two Papua rivers between January 2011 and July 2015 to suspend tailings from its mining operations.
The Grasberg mine operated by Freeport is the world's largest gold mine by reserves and one of the biggest copper mines.
Under Indonesian law, payment is required about 30 days after receipt of the ruling. Freeport Indonesia, a unit of Phoenix, Arizona-based Freeport-McMoRan Copper & Gold Inc., is expected to appeal to the Supreme Court.
Enembe said the province was claiming taxes based on a 2011 local government decree. Freeport had argued it should pay a lower rate based on a decades old contract with Indonesia’s government.
2) Here is Freeport Indonesia Strategy When Its Contract Ends by 2021
Friday, 27 January 2017 | 20:14 WIB
JAKARTA, NETRALNEWS.COM - President Director of PT Freeport Indonesia (PTFI) Chappy Hakim reveals the company already reported its strategy to Freeport McMoRan in the US if the contract which is going to expire by 2021 is extended.
Among others, he will take measures to develop air transport around Papua mines.
The former Air Forces Chief of Staff of Indonesian Armed Forces (TNI) explained if Freeport exploration continued, the construction of air transport infrastructure may become something strategic. It is because the sole most effective access in East Indonesia is by air.
“The strategy if PTFI can continue; the next explorations I made strategies and have been submitted to US, McMoRan. There are some, among others, what is important is to develop air transport communication,” he said in Jakarta, Friday (1/27/2017).
Chappy said land and sea transport have many limitations. Hence, development of air transport infrastructure makes company’s operations and economy in Papua increase.
“In Papua, when talking about maritime axes, it stops at beaches. Speaking about Indonesia actually maritime infrastructure is inadequate, [it] must be with air transport. In islands area, this becomes primary transportation system, in East Indonesia and several regions which do not have infrastructure,” he explained.
He said geologically, sky conditions in Papua are considered good with many passages of aircraft. Freeport is going to ask TNI Air Forces to utilize several unused airbases.
“Flight infrastructure in Papua is outstanding. Air passage, with limited field becomes major transportation mainstay. I proposed in Biak, airbases which are no longer used, whether Freeport can cultivate to develop N-219 aircraft. It would become air transport backbone there, because it is actually suitable,” he concluded. (*)