Freeport and Customs Respond to Potential 10% Export Duty Tariff

December 25, 2023, 07.30 AM | Reporter: Filemon Agung

ILUSTRASI. A number of Haul Trucks are operated in the open-pit mining area of PT Freeport Indonesia in Timika, Papua, on Saturday (19/9). PT Freeport Indonesia now has export permits for July 2015 - January 2016 with an export quota of 775,000 tons of copper concentrate. In addition, Freeport has a reduction in export duties to five percent due to the progress of the development of mineral processing and refining facilities (smelter) in Gresik, East Java, which has reached 11 percent. ANTARA FOTO/Muhammad Adimaja/kye/15

FREEPORT JAKARTA, December 24, 2023 - PT Freeport Indonesia (PTFI) continues to strive for a relaxation of the 10% export duty tariff on copper concentrate exports next year, or starting January 2024.

The imposition of this new tariff is in accordance with the Minister of Finance Regulation (PMK) Number 71 of 2023 which regulates export duties for mining companies.

Referring to the Minister of Finance Regulation (PMK) Number 71 of 2023, companies with smelter progress reaching 70%-90% (stage II) will be charged an export duty on copper concentrate of 7.5% until December 31, 2023. Then the export duty will increase to 10% from January 2024 until May 31, 2024.

As of November 2023, the construction progress of PTFI's copper cathode smelter in Gresik, East Java, has only reached 81.6%. If referring to these regulations, PTFI is potentially going to be charged a 10% export duty next year.

EVP Corporate Communications PTFI, Agung Laksamana

EVP Corporate Communications PTFI, Agung Laksamana, confirmed that PT Freeport Indonesia is still actively discussing with the Indonesian Government to reach the best agreement. According to him, in accordance with the provisions of the Special Mining Business Permit (IUPK), the export duty tariff applies for the duration of the IUPK.

"We are still continuously discussing with the Government to find the best solution," said Agung.

In order to achieve an objective and accurate customs policy, PTFI considers it reasonable to object and appeal against the calculation of the export duty determination. Agung expressed his hope that the Government will apply the export duty provisions in accordance with the agreed IUPK.

Meanwhile, the Ministry of Finance (Kemenkeu) is still in the process of evaluating the imposition of a 10% export duty on PTFI's copper concentrate exports next year. The Director General of Customs and Excise at the Ministry of Finance, Askolani, stated that the government is implementing the policy that has been set, in line with PMK 71 of 2023.

"For 2024, of course, it will be evaluated until the end of December 2023 as input for the direction of policy updates in 2024," he said.

Askolani did not provide details about the evaluation points of the Ministry of Finance, but confirmed that several points will still be evaluated until the end of this year. PTFI continues to hope that the export duty policy applied is in accordance with the agreement that has been made previously.