Freeport insists on investment stability

Courtesy of Freeport

Gold and copper giant PT Freeport Indonesia reiterated demand for an investment stability agreement as condition for the company to convert its current mining permit status from mining contract of work (or CoW) to the special mining business license (or IUPK) as requested by the government.

The investment stability agreement will provide rights and protection for the company similar to that in the current CoW. ?We want (to convert into) IUPK. But we hope the content (of the IUPK) to be the same as CoW because it protects investment,? PT Freeport Spokesman Riza Pratama told Bisnis Indonesia.

The government issue on January 12 a new regulation allowing mineral mining companies to continue export of mineral concentrates including copper concentrates produced by PT Freeport as long as they meet certain conditions including converting their mining permit status from CoW to IUPK. Miners holding the IUPK will have to follow prevailing regulations including in terms of taxes, instead of nailed down regulation under the CoW.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said on January 18 that all mineral mining companies wishing to continue export of mineral concentrates must follow the recently-introduced new Government Regulation No 1/2017 and the implementing ministerial regulations. He said that there will be no more negotiation. ?All must follow the regulations. All are equal before the law,? he said.

PT Freeport President Director Chappy Hakim was quoted by Kontan as saying Monday that negotiation process with the government was still in progress. As such, until definitive agreement has been reached, he declined to provide details.

PT Freeport, a subsidiary of US-based Freeport McMoRan Copper & Gold, has not made any export of copper concentrates since the new mining regulation was introduced. Riza said that the company will start to be affected by the export ban if the company fails to obtain export permit in the next two months.

?If in two months (PT Feeport) can?t export, we?ll have difficulties. We?re still discussing with the government so that we can resume export,? Riza said, adding that shipment of copper concentrates to domestic smelter owned by PT Smelting in Gresik, East Java, has not been affected.

Freeport shipped about 37 percent of its copper concentrates to PT Smelting, while the remainders were exported to Spain, South Korea, China, India, the Philippines, and Japan.

Failing to get the export permit will force PT Freeport to cut down production, and would lead to layoff. (*)