Freeport wants future dispute to be settled via arbitration
Friday, June 23 2017 - 03:38 AM WIB
Secretary General of the Ministry of Energy and Mineral Resources, Teguh Pamudji was quoted by Bisnis Indonesia as saying Friday that PT Freeport also demanded a clause, including additional agreement outside the IUPK, which entitles the company for a second 10-year extension of the mining license until 2041 without obstacle from the government.
The company is currently engaged in lengthy negotiation process with a government team led by Teguh over the future of its mining operations in Papua Province following the introduction of a new government regulation in January which requires the company to among others convert its current mining permit status from contract of work (COW) to IUPK as part of conditions to be able to continue export of copper concentrates for another five years. PT Freeport?s current mining contract is set to expire in 2021. The negotiation is targeted to be completed in October.
Teguh said that government has yet to reach agreement over the new requests made by PT Freeport. He pointed out that according to IUPK, any dispute must be settled through the state administrative court, not arbitration. ?We?re still studying the request. Generally, under the IUPK dispute settlement is made through state administrative court,? he said.
He reiterated that the government has agreed for PT Freeport?s mining permit to be extended until 2031 when the current contract expires in 2021. He said that the company wanted assurance that it can obtain extension until 2041 by producing a new agreement outside the IUPK. Teguh said that the Indonesian law system does not acknowledge additional agreement outside the IUPK.
PT Freeport has insisted for mining permit that is valid until 2041 as the company plans to invest at least US$15 billion in underground mine, and another more than $2 billion in planned copper smelter, possibly to be located in Gresik, East Java. (*)