Government, PT Freeport start second round negotiation process
Friday, May 5 2017 - 01:55 AM WIB
Petromindo|Godang
The government and gold and copper giant PT Freeport Indonesia started on Thursday a second round negotiation process to resolve dispute over the company?s operations in Indonesia.
The Ministry of Energy and Mineral Resources said in a statement that the negotiation process is targeted to be completed on October 10, although Minister of Energy and Mineral Resources Ignasius Jonan expected it could be concluded much sooner.
The statement said that there were four main issues that must be resolved by both sides. The first is the issue of long-term investment stability demanded by PT Freeport including with regards to fiscal terms and taxes both at the central and local government. Other issues are the company?s mandatory divestment obligation, requirement to develop domestic smelter, and the issue of the company?s future operation after 2021 when its current mining contract of work expires.
The Thursday meeting was also attended by visiting CEO of US-based Freeport McMoRan Inc, Richard Adkerson. The US firm is the parent of PT Freeport, which operates the giant Grasberg mine in Papua Province.
The government?s negotiation team comprises of officials from the Ministry of Energy and Mineral Resources and other related ministries and government institutions, provincial administration officials, Mimika regency administration officials, and representatives of local tribes.
The government introduced a new regulation in January of this year, allowing mining firms to continue export of mineral concentrates including copper concentrates produced by PT Freeport on certain conditions including the conversion of their mining permit status from mining contract of work (COW) to IUPK special mining business license, and commitment to develop domestic smelter .
PT Freeport has demanded that the IUPK to contain similar fiscal and legal terms as those set under the COW to help ensure its long-term investment stability, a request turned down by the government, thus triggering the current dispute. The company had threatened to go to international arbitration if mutual resolution could not be reached with the government.
Meanwhile, Adkerson said in the statement that the company is hopeful that a win-win solution can be achieved from the negotiation process.
Editing by Reiner Simanjuntak