Freeport, Newmont to soon conclude contract renegotiation: Official
Monday, June 2 2014 - 01:21 AM WIB
Director General of Coal and Mineral R. Sukhyar said that negotiation with PTFI is only focused on one remaining difficult issue of divestment obligation, while with NNT on the royalty issue. ?For Freeport, the remaining issue is only divestment, while for Newmont is regarding state revenue,? he said.
He said that the government has agreed to lower PTFI divestment obligation to 30 percent from 51 percent considering the company will undertake underground mining activity which requires huge investment. Meanwhile, PTFI President Director Rozik Soetjipto was quoted by the paper as saying that his company insisted on only divesting 20 percent stake.
He said that once the contract renegotiation has been concluded, the government will issue a side letter to allow the two firms to resume export pending the completion of the amended contracts.
He said that PTFI has agreed to build domestic smelter in Gresik, East Java, while NNT has agreed to supply part of its copper concentrates to the Freeport smelter. The side letter will also include the amount of export tax that must be paid by the two firms to resume copper concentrates export. The two companies have also agreed to put down a smelter guarantee funds, amounting 5 percent of the total investment for the smelter, in a government account, as part of the requirements to resume export.
PTFI and NNT have not been able to export copper concentrates since the government introduced the mineral ore export ban policy on January 12 and the subsequent tighter export restrictions on concentrate exports. NNT had previously threatened to suspend 80 percent of its workers if it would not be able to resume export by June 1, which the company canceled following recent talks with the government. (*)