Freeport finally deposits smelter funds

By Maryati Dimursi

Gold and copper giant PT Freeport Indonesia has finally put down the necessary deposit with the government?s bank account as a form of the firm?s commitment in realizing its planned domestic smelter, Director General of Mineral and Coal R. Sukhyar said Tuesday.

But Sukhyar said that the Ministry of Energy and Mineral Resources (MEMR) will not yet issue export recommendation letter for the company as it has yet to sign an MoU with the government regarding the completion of the mining contract renegotiation.

?They have deposited the funds to Bank BRI,? said Sukhyar. Freeport has been required to put down about US$115 million deposit, or 5 percent of the total investment requirement for its planned smelter.

The deposit is part of the requirements set by the MEMR for the company to be able to obtain the export recommendation letter from the ministry, a key requirement to obtain export approval from the Ministry of Trade. Since the export restriction policy introduced by the government in January of this year, Freeport has not been able to export its copper concentrates.

Another requirement to allow Freeport to resume export is that the company must sign an MoU to market the conclusion of the mining contract renegotiation, which focuses on six main issues including royalty hike and share divestment.

Sukhyar said that Freeport Indonesia has agreed to pay a royalty of 3.75 percent for its gold output.

?A royalty of 3.75 percent has been agreed. The issue is that when will the royalty be paid. We want MoU to be signed, payment made,? said Sukhyar.

Editing by Reiner Simanjuntak