Freeport Indonesia reiterates demand for contract extension

By Thomas Sembiring

Gold and copper giant PT Freeport Indonesia (PTFI) reiterated its demand for an early extension of its current mining contract, which is set to expire in 2021, to allow the company to proceed with its planned multi-billion dollar copper smelter project in East Java and underground mine in Papua.

PTFI Vice President Director Clementino Lamury said on Wednesday that the company is seeking to extend its mining contract to 2041. He said the company needs certainty over the contract extension request to allow it to raise required funds for its projects and to obtain approval from shareholders.

?The shareholders and partners need commitment (for the contract extension) so that funding for the projects can be released. Extension of the (mining) operation until 2041 is crucial,? said Clementino during a focus group discussion held in Jakarta by the National Industry and Economic Committee.

Elsewhere, Clementino also demanded the government to abolish the 7.5 percent export duty imposed on the company?s copper concentrates export as part of incentives for its planned smelter project.

PTFI, which is a subsidiary of US-based Freeport McMoRan Copper & Gold Inc, plans to develop a copper smelter with production capacity of 2 million tons per year in Gresik, with estimated investment of about US$800 million.

PTFI has been demanding for an early extension of its current mining contract. But existing regulation stipulates that the company can only make a request for the contract extension two years prior to its expiry.

Editing by Reiner Simanjuntak