Finance ministry to let MEMR decide on Freeport export duty issue
Wednesday, April 19 2017 - 04:04 AM WIB
Courtesy of Freeport
The Ministry of Finance will let the Ministry of Energy and Mineral Resources (MEMR) decide on the request made by gold and copper giant PT Freeport Indonesia for a lower export duty, Kontan reported on Wednesday.
The paper quoted a senior official at the Ministry of Finance who requested for anonymity as saying that the ministry will follow whatever decision taken during the current negotiation between the MEMR and PT Freeport.
The source added that the ministry will not revise the existing Minister of Finance Regulation No 13/2017 which sets an export duty of 7.5 percent for export of mineral concentrates including copper concentrates produced by PT Freeport.
As has been previously, reported PT Freeport is said to have requested for a lower export duty of 5 percent for the company to resume export of copper concentrates, which has been suspended since January of this year following the issuance of a new government regulation and MEMR regulation requiring certain conditions for miners to be able to continue export of mineral concentrates including converting their mining permit status from mining contract of work (COW) to special mining business license (IUPK), commitment to build domestic smelters, and pay export duty.
The MEMR has ruled that miners whose smelter projects have yet to exceed 30 percent construction progress must pay export duty of 7.5 percent. The export duty will decline in line with the progress of the smelter project. PT Freeport is planning to develop a copper smelter in Gresik, East Java Province.
The company is currently locked in negotiations with the MEMR over the new conditions required for continuing export of copper concentrates. The ministry has recently issued a temporary IUPK for PT Freeport to be able to quickly resume export while negotiation is still in progress, expected to be concluded on October 10, but the company has yet to resume export as it has demanded for a lower export duty. PT Freeport has yet to provide official comment on the export duty issue. (*)