Govt has not reviewed Freeport?s contract

The government has yet to review the gold and copper mining company PT Freeport Indonesia?s contract of work as the team from the Ministry of Energy and Mineral Resources is still the phase of receiving suggestions and inputs, the Koran Tempo reported on Friday.

Director of mineral and coal at the ministry of energy and mineral resources M.S. Marpaung said his office has not yet reached the stage of review.

?The issue of production in fact is the Ministry of Energy?s business but with regards the state revenues in relation to the taxes, we are not the experts,? Marpaung said in Jakarta on Thursday.

Supreme Audit Agency (BPK) said in a press release on Wednesday that the directorate general of geothermal, coal and minerals will review Freeport?s contract, minerals price determination and recalculation of royalty payments to the government.

BPK?s audit report found several lapses, including the calculation of average price of copper, silver and gold which is not based on accounting principles like the price should be based on the selling price per transaction.

Meanwhile, public accounting firm Ernst & Young has also found that the Freeport had not paid the royalty amount of $369.5 million in 2003 and 2004. (*)