1) Indonesia allows Freeport to carry out exports for one year
1 hour ago | 268 Views
Pewarta: Andi Abdussalam
Jakarta (ANTARA News) - The Indonesian government has given PT Freeport a chance to carry out concentrate exports for one year, although it is still negotiating the continuation of the US-based companys license to operate in Indonesia.
The Ministry of Energy and Mineral Resources (ESDM) has issued a recommendation for PT Freeport to export raw minerals for a period of one year. However, according to the Ministry of Trade, PT Freeport has yet to submit application for the export agreement letter (SPE).
Based on the recommendation, Freeport is allowed to export 1,113,105 wet metric tons of copper concentrates. The permit allows it to carry out exports from Feb 17, 2017 to Feb 16, 2018.
According to Finance Minister Sri Mulyani, the reluctance of Freeport to carry out the export of copper concentrates when it is offered an option could have negative impact on its performance in the long run.
"Freeport is a public company; if it stops (exports), its stocks will fall. So, in this case, no party will lose or win," Mulyani stated in Jakarta on Wednesday.
The Indonesian government is still continuing its negotiation process with Freeport to seek the best solution for the national economy and for the continuation of Freeports investment in Indonesia.
"We can mutually look at facts contained in the Work of Contract (WoC) and those in the mining law. Since it is difficult to agree to it, the best option indeed is to safeguard our common interest," Mulyani added.
PT Freeport Indonesias parent company Freeport McMoRan Inc, said it would continue to operate in the country despite disagreement on its contract status with the government of Indonesia.
"We are committed to staying in Indonesia. This is an important resources for Freeport, also an important object for the government of Indonesia and Papua," says President and CEO of Freeport McMoRan Inc Richard C. Adkerson in Jakarta on Monday.
PT Freeport Indonesia has large copper and gold mines in the countrys easternmost regions of Papua, but now , the company has stopped operation as it is not allowed to continue export its copper concentrate over contract disagreement.
In 2009, the government had taken a decision to ban the export of raw minerals and made it mandatory for mining companies to build smelters. It decided to ban the export of unprocessed mineral ores as of January 2014 in a bid to encourage miners to process ore domestically.
However, after protest from the industry, the implementation of the ban was pushed back to January 11, 2017, to give an opportunity to mining companies to build smelters.
Recently, the government issued Government Regulation (PP) No. 1 of 2017 necessitates mining companies to change their contract of work (CoW) status to a special mining business license (IUPK), if they want to continue exporting concentrates. But they are given a five year deadline to build smelters.
Freeport has called for applying old regulations that were used when it was operating under a CoW status. Energy and Mineral Resources Minister Ignatius Jonan however noted that if it changes the status into an IUPK, several provisions (of the CoW) will also be altered.
"If (the status of a company) is changed into an IUPK, it will have many provisions. Let the finance minister review which old regulations can be used as this falls under the domain of the tax law similar to the regional government laws, levies, and others," Minister Ignatius Jonan remarked.
It was previously reported that Freeport claimed it had not yet reached a common ground with the government on the change of status from CoW to an IUPK. "We are awaiting a temporary IUPK to carry out exports (of raw minerals), but the government has not yet issued a permit to us," Freeport spokesman Riza Pratama stated after a hearing with the House of Representatives in Jakarta on Thursday (Feb 9).
According to CEO of Freeport McMoRan Inc Richard C. Adkerson, the U.S. mining giant had invested US$12 billion and is investing US$15 billion in Indonesia providing jobs for 32,000 Indonesians.
The government of Indonesia also had earned 60 percent of financial benefit directly as a result of the operation of Freeport. Taxes, royalty and dividends paid to the government since 1991 have exceeded US$16.5 billion and Freeport McMoRan had received US$108 billion in dividend, he added.
"The taxes, royalty and dividend to be paid to the government in the future until 2041 is estimated to exceed US$40 billion," he said.
The Indonesian Chamber of Commerce and Industry (Kadin) said that Freeport contributed to more than 90 percent of the regional gross domestic product (GDP) of Mimika District and about 37 percent of Papua Provinces GDP.
Therefore, Deputy Chairman of Kadin for eastern Indonesia affairs Andi Rukman Karumpa asked to manage the Freeport issues well, so that it would not become counterproductive.
"The issue of PT Freeport should be properly managed, in a measured manner, and with a clear target," Karumpa said in Jakarta on Wednesday.
According to him, the turmoil between countries and some major corporations such as Freeport is a common one, such as the dispute between Aramco and the Saudi Arabian government in the past.
As a result, Aramco fell into the hands of the Saudi government, he stated.
"Contract dispute with multinational companies is common, but there should be measurable goals. The volatility is managed, so that it can be more productive in the long run or short term," he noted.
He remarked that Kadin supports the governments firmness against PT Freeport, because the enterprise is considered to have continued stalling its obligation to build smelters in the country.
Freeport also left the impression that it always tried to dictate its will on the government. "It (Freeport) met stubborn Minister Jonan who does not want to be dictated," he remarked.
However, Karumpa reminded that this issue would be managed well, because it affects the economy in Papua as well. (A014/INE) EDITED BY INE (A014/KR-BSR/A014)
2) Minister Sri Mulyani warns Freeport not to stop production
Jakarta | Wed, February 22, 2017| 04:06 pm
Finance Minister Sri Mulyani Indrawati has warned gold and copper miner PT Freeport Indonesia that if it ceased production its share prices would be sharply affected.
“Freeport is a public company. If it stops production, its shares will fall,” said Sri Mulyani in Jakarta on Wednesday as reported by kontan.co, adding that there would be no winner in the dispute.
The company has reportedly stopped producing concentrate at its mining site in Papua following a dispute with the government over the requirement that it convert its contract of work (CoW) to a special mining license (IUPK).
Previously, Freeport McMoRan president and CEO Richard C. Adkerson said the 2009 Mineral and Coal Mining Law stipulated that the CoW signed in 1991 was still valid, but the government had requested that Freeport convert the contract.
The company, which insists that the government has to respect the CoW, has reportedly stopped production, claiming that its storage space is full of concentrate after it failed to obtain an export license.
Sri Mulyani expressed the hope that Freeport would cooperate with the government. “We have continuously told Freeport that any regulation [contract] would maintain the stability of its economic activities. But at the same time, we [the government] have to uphold prevailing laws,” said Sri Mulyani.
The government has given the company six months to adjust to the new contract, as per the law. (bbn)
TEMPO.CO, Jakarta - The Indonesian National Armed Forces (TNI) commander Gen. Gatot Nurmantyo, accepted the Commanding General of the United States Army Pacific, General Robert Brown, in an official visitation to strengthen the military partnership between Indonesia and the United States.
General Gatot mentioned the importance of sharing intelligence possessed by both countries.
“TNI must work together with the U.S. regarding terrorism, especially since ISIS groups have expanded outside of their region which includes the Southeast Asian region,” Gatot said on Tuesday, February 21, 2017.
According to him, there are currently two crucial trading routes that are prone to terrorist attacks, which are the Malacca Strait and Makassar Strait. These are the regions where the exchange in intelligence would be most essential.
General Gatot also discussed the partnerships in the education sector, which also acts as a military strengthening tool for both countries. “There would be more TNI personnel exchanges to participate in the training, either in the military or with other U.S. institutions,” he said.
There are other military exchanges that can be conducted between both countries, such as the Subject Matter Expert Exchange (SMEE).
Chief Staff of the Indonesian Army, General Mulyono, has purchased a U.S' Black Hawk as a tactical transport helicopter due to Indonesia’s experience in utilizing a number of U.S. weapons system. He also appreciates U.S. army's support at the other weaponry systems, such as the F-16 Fighting Falcon and Apache AH-64 chopper, that have been given to Indonesia.
Brown assures that the procurement of Apache and Black Hawk helicopters for Indonesia will meet no challenges since it has been approved by the U.S. “I am certain that the support will be a useful partnership for both sides,” he stated.
General Brown views that the meeting is useful in strengthening the stability and safety of the Pacific region.
He claims that the U.S views Indonesia as something special and also says that the military partnership with the Indonesian Army, Navy, and Air Force will continue in the future. “[Our] highest praise and appreciation for TNI’s support in a number of [activities] and the Garuda Shield joint exercise.”