Freeport and Newmont Gets Export Duties Exemption

JAKARTA. The government finally freed export duties to PT Freeport Indonesia and PT Newmont Nusa Tenggara. The reason, each company had promised to build a smelter in 2017.

Previously, Freeport and Newmont voiced his opposition to the implementation of export duties on mineral exports. Last month, Chief Executive Officer of Freeport McMoRan Copper & Gold Inc (FMCG) United States, Richard C Adkerson visited Minister of Industry MS. Hidayat, Minister of Energy Jero Wacik, and Finance Minister Chatib Basri to lobby for duty exemption.

Dede I Suhendra, Director of Mineral Business Development at the Energy and Mineral Ministry, states, plans to give dispensation to Freeport and Newmont will be discussed among government institutions. This is because, levies export duties stipulated in the Regulation of the Minister of Finance.

Dede is reluctant to disclose details of the plan. One thing for sure, the government will give a dispensation to Freeport and Newmont as long as they are committed to process minerals in the country in 2017.

Sukhyar, Director General of Mineral and Coal at the Energy Ministry, said, their ministry will propose incentives for Freeport and Newmont it to the Ministry of Finance. "The policy to impose export duty will continue. But we will provide convenience," he added.

Sukhyar denied he had been lobbied by the two companies. "We are not under pressure at all about the levy," he said.

Dede said the government did not want to burden Newmont and Freeport with duties that may disrupt their operations. Moreover, the two companies are working to meet a variety of requirements to purified concentrates in the next three years. "We are still evaluating whether the technical requirements of the two companies has been fulfilled,” he said.

He stated, the dialogue between the government and Freeport and Newmont running smoothly. "If the company obedient, we certainly would not hamper their operations," he said.

For information, Freeport has held a conditional sale and purchase agreement with PT Indosmelt concentrate and will build a purification plant (smelter) and PT Aneka Tambang Tbk. While Newmont has signed an agreement to build smelter with PT Nusantara Smelting and Indosmelt Corporation.

Daisy Primayanti, Freeport Indonesia spokesperson, said that Freeport still discussing the export duties problem with the government. "We hope this discussion will achieve the best solution,” she said.