Freeport Indonesia urged to avoid lay off

By Bambang Atmaja

Expert staff at the Presidential Office, Firmansyah, urged PT Freeport Indonesia (PTFI), the local unit of US giant Freeport McMoRan Copper and Gold Inc, to avoid laying off workers next year when the export ban on mineral ores starts.

PTFI President Director Rozik B. Soetjipto has earlier appealed to the government for the company, which operates a giant gold and copper project in Papua, to be allowed to continue copper concentrate export in 2014 as the only domestic copper smelter would not be able to absorb its entire output, while planned new smelters have yet to be constructed.

The government will start banning mineral ores export in 2014 as mandated by the 2009 mining law in a bid to generate greater value added from the country?s minerals production, requiring miners to build domestic smelters. PTFI has recently signed MoUs on the supply of copper concentrate with two private firms planning to build new smelters, which if run smoothly would only be completed in 2017. PTFI currently supplies about 30-40 percent of its copper concentrate output to a smelting firm in Gresik, East Java, the only copper smelter operating in the country.

Senior government officials have earlier said that that the export ban would proceed as planned, and it would not give dispensation to PTFI and other miners.

Rozik said that if the company is banned from continuing export next year, it would have to drastically cut down production capacity.

?Let?s wait for the final decision of the Ministry of Energy and Mineral Resources (on whether export would still be allowed in 2014). But if possible, do not layoff the workers,? Firmansyah told Petromindo.com on Monday. There are fears that if PTFI cut down production capacity, it would consequently lead to massive layoff.

President Susilo Bambang Yudhoyono said last week firms should avoid reduction of employees amid the slowing global economic slowdown that hit the country?s economy.

Editing by Reiner Simanjuntak