Chappy Hakim resigns from PTFI top post

Petromindo|Thomas

Chappy Hakim, President Director of gold and copper giant PT Freeport Indonesia (PTFI) announced Saturday his resignation from the top post and will return to an advisory role with the company.

?Serving as President Director of PTFI involves an extraordinary commitment of time, I have decided it is in the best interests of PTFI and my family to step down from my duties as President Director while continuing to support the company in an advisory role,? Chappy said in a statement without providing further details.

The resignation comes at a time when PTFI is struggling to negotiate with the government to maintain favorable fiscal terms including nailed-down tax principle for its new mining permit status required under a new regulation to allow miners to resume export of mineral concentrates which has been banned since January 12 of this year.

The government last month introduced a new regulation allowing miners to continue export of mineral concentrates including copper concentrates produced by PTFI for another five years under certain conditions including converting their mining permit status from mining contract of work (or COW) to special mining business license (or IUPK). PTFI was the first to announce its readiness to convert into IUPK but demanded certain conditions including fiscal terms such as nailed-down tax similar to those set in the COW regime. The government, however, has insisted that tax under an IUPK follows prevailing regulations not nailed-down principle.

Minister of Energy and Mineral Resources Ignasius Jonan then issued a ?transitional regulation, allowing for the nailed-down principle and other terms in the COW regime to be applied in the IUPK pending completion of negotiation with the miners over the final terms of the IUPK, a process that is expected to be completed within the next six month.

Following the issuance of the transitional ruling, the Ministry of Energy and Mineral Resources issued on Friday export recommendation letter for PTFI, a key requirement for the company to be able to obtain export permit from the Ministry of Trade. The ministry said in a statement that PTFI has been given an export quota of 1,113,105 wet metric tons of copper concentrates under an export recommendation letter valid from February 17, 2017 until February 16, 2018.

Meanwhile, information obtained by this portal said that Chappy decided to step down from the top post at PTFI, a subsidiary of US-based Freeport McMoRan Copper & Gold Inc, because he opposed plans to file lawsuit at an international arbitration against the government of Indonesia if the company fails to obtain similar legal and fiscal terms for its new IUPK as set under its original COW.

Chappy was forced to make an apology on January 10 to the House of Representatives Commission VII on mining and energy following an incident with a member of the commission at the end of a hearing session between the commission and mining industry players a day earlier.

President Director of gold and copper giant PT Freeport Indonesia Chappy Hakim made an apology to House of Representatives Commission VII on mining and energy following accusation that he was being rude to a lawmaker during a meeting on Thursday. He was accused by lawmaker Mukhtar Tompo of being rude to him.

Editing by Reiner Simanjuntak