Freeport has yet to be able to withdraw smelter guarantee fund

The Ministry of Energy and Mineral Resources (MEMR) has yet to approve a request by gold and copper giant PT Freeport Indonesia to withdraw so-called smelter guarantee fund worth US$20 million.

MEMR Spokesman Sujatmiko said on Thursday that Freeport must meet a number of requirements to be able to withdraw the funds including submitting progress report of its copper smelter project and the spending report. He added that the progress of the project must also be in line with the schedule previously drafted together with the Directorate General of Mineral and Coal.

PT Freeport is planning to develop a US$2.3 billion copper smelter in Gresik, East Java, which according to the initial schedule set by the government must be completed by 2017, when export of mineral concentrates including copper concentrates would no longer allowed.

To help ensure commitment in developing smelters, mineral concentrates producers such as PT Freeport are required to deposit the smelter guarantee fund with the government?s account, which can later be withdrawn in line with progress of the smelter project.

PT Freeport Spokesman Riza Pratama was quoted by Kontan as confirming the company has not been able to withdraw the smelter fund. He, however, claimed the company has met the requirements. He added that the funds are needed to help finance the construction of the smelter project. (*)