Freeport might change contract of work status

JAKARTA. The Spokesman of PT Freeport Indonesia Riza Pratama said that the company is ready to change the status of contract of work to special mining license (IUPK) with several conditions. “We have just proposed the readiness to convert to IUPK,” he told KONTAN, Monday (15/1).

The proposal includes some conditions, including the extension of Freeport operation up until 2041, or 20 years after the end of Freeport’s contract in 2021. Freeport also requests the government to nail down the tax. “We need fiscal insurance,” he said.

In terms of smelter construction, Freeport has commitment to continue the smelters constructions soon after the extension of the operational rights. “Based on the commitments, we hope that the government will extend Freeport’s export license,” he said.

Director General of Mineral and Coal at Ministry of Energy and Mineral Resources Bambang Gatot Ariyono said that the ministry has received the proposal. However, Bambang has not confirmed yet whether the government will fulfill the requests.

Bambang also did not respond whether PT Amman Mineral Nusa Tenggara has proposed the convert to IUPK. Meanwhile, the Spokesman of PT Amman Mineral Nusa Tenggara Rubi Purnomo has not yet responded phone calls and short messages from KONTAN.

The Expert of Natural Resources at University of Tarumanegara Ahmad Redi said, Freeport has proposed unreasonable requirements. “The government should not fulfill the requests,” he said.

According to Redi, the government has to take firm stance in forcing Freeport to build smelters. Otherwise, the company will not be allowed to export the concentrates. He suggests the government to maintain the Freeport’s contract until 2021, and subsequently conduct evaluation whether the contract can be extended.

Let alone, ex-Freeport’s mines would likely be operated by state owned enterprise (SOE). “The government has to be firm, and should not fulfill Freeport’s requests. The conditions have to be rejected,” he said.

Director of Centre for Indonesian Resources Strategic Studies (Cirrus) Budi Santoso said that Freeport proposed the conditions to avoid divestment and smelter construction. However, the government should not extend Freeport’s contract, if the government is consistent with national interests. “Freeport should comply with IUPK rules without exception,” he said.
(Muhammad Farid/Translator).