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Freeport and Amman obtained IUPK status

Saturday, 11 February 2017 | Pratama Guitarra

JAKARTA. Minister of Energy and Mineral Resources (ESDM) has signed the transformation of contract of works (CoWs) status of PT Freeport Indonesia (Freeport) and PT Amman Mineral Nusa Tenggara (AMNT) to special mining license (IUPK), Friday (10/2).

Director General of Mineral and Coal at the Ministry of ESDM Bambang Gator Ariyono said, Freeport and AMNT had submitted the proposal for the status conversion on 26 January 2017 to comply with the Government Regulation No 1/2017 on Mineral and Coal Business. Bambang said, Minister of ESDM Ignasius Jonan has signed a decree on the status conversions.

The status conversion will bring some consequences to the mining companies, as the nature of CoW is nail down, while the nature of IUPK is prefilling.

According to Bambang, the IUPK status allows Freeport and Amman to propose the plan of mineral and mining exports. However, to date, both of mining companies have not yet proposed for the mineral export licenses.

Related to the issuance of the decree on the status conversion, the government will ask Freeport to propose the amount of copper concentrates export in one condition: there should be a written integrity pact to establish smelter. In this case, the government will regularly supervise the progress of the smelter development in every six years. In addition, Freeport will also be required to pay export duties, which will be estimated based on the progress of the smelter construction.

Bambang claimed that the Ministry of ESDM has authority in determining the export quota. In the six months earlier, Freeport obtained an export quota of 1.42 million tons.

Unfortunately, the Spokesperson of Freeport Riza Pratama did not respond to KONTAN’s inquiries related to this matter.

Meanwhile, the Spokesperson of Amman Rubi W. Purnomo still cannot confirm the amount of export quota. According to Rubi, Amman is still waiting for the approval of status conversion from CoW to IUPK. Amman has requested the status conversion since 25 January 2017.

As information, the conversion of Freeport and Amman’s status from CoW to IUPK was has just been signed recently. Therefore, the decree is still at the office of Ministry of ESDM, or has not been sent to the mining companies.

(Muhammad Farid/Translator)

Reporter: Pratama Guitarra
Editor: Yudho Winarto