Govt deliberating demand of Papua?s regency for Freeport royalty

The government is studying the demand from Papua?s Puncak Jaya regency administration that it be given a portion of the royalty received by the government from copper and gold miner PT Freeport Indonesia (PTFI), Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Monday.

PTFI was carrying out exploration activities in Puncak Jaya so that it was not entitled to the royalty paid by PTFI to the government. Existing laws and regulations on general mining stipulate that such royalty was paid only to regencies with mining exploitation projects, Purnomo told reporters after attending a meeting on the case. Also taking part in the meeting were Minister of Finance Boediono, senior officials of the Ministry of Home Affairs, Papua provincial government officials and PTFI?s representatives.

Puncak Jaya is located next to Mimika regency where PTFI has a huge copper and gold mining project. The company is carrying out copper and gold exploration activities in Puncak Jaya and other regencies in Papua.

Purnomo said that Puncak Jaya?s demand was based on a decree issued in 2001 by Papua province governor JP Solossa. The gubernatorial decree did not differentiate between mining exploration areas and exploitation areas, he said.

Under the current general mining law, provinces receive 80 percent of the royalties paid to the government by mining firms. Royalties for the provinces are then split between provincial administrations and regencies with mining exploitation projects.

Purnomo said Monday their meeting had not turned out any conclusion, and that they would have to hold another meeting on the same issue.

PTFI is 91 percent owned by New Orleans-based mining giant Freeport McMoran Copper and Gold Inc. (godang)