Auditors to decide fate of Amman, Freeport?s future export

Petromindo|Thomas

The government has assigned three state-owned companies including PT Surveyor Indonesia, PT Sucofindo, and PT Rekayasa Industri (Rekind) as independent auditors that would evaluate and verify progress of domestic copper smelter projects of two gold and copper giants PT Amman Mineral Nusa Tenggara and PT Freeport Indonesia.

Bisnis Indonesia quoted Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources Bambang Gatot Ariyono as saying Wednesday that the two mining firms can select which of the three would be assigned as the auditor.

He said that based on the results of the progress audit, the government will then decide whether the mining firms can continue export of copper concentrates or not. He added, however, that the government has not set a deadline for the auditors.

The government introduced a new regulation in January of this year, under which mining companies can continue export of mineral concentrates for the next five years on certain conditions including putting commitment in place to develop domestic smelter. The smelter project will then be evaluated by an independent auditor every six-month. Miners failing to meet 90 percent progress of the six-month plan risked their export permit revoke.

Amman received an export permit in February of this year, with export quota of 675,000 tons of concentrates for one year period. Amman Spokesperson Rubi Purnomo said the company has submitted detailed plan of its copper smelter project to the ministry, and thus independent auditor can immediately start evaluation and verification process.

Meanwhile, PT Freeport, which is a local subsidiary of US Freeport McMoRan Inc, was given an export permit in April of this year, with one-year quota of 1.11 million tons. As such, the audit of the smelter project shall only start in October of this year.

But PT Freeport has said that the plan smelter project will only be realized once the company has reached agreement with the government over a number of issues. The company has since April of this year been engaged in lengthy negotiations with the government to settle disputes arising from the introduction of new government regulations in January. This include extension of its mining permit until 2041, investment stability, and mandatory divestment program.

PT Freeport Spokesman Riza Pratama has said that all these issues including the planned smelter project are on large package that must be settled with the government. (*)