Govt hopes to increase stake in Freeport
Saturday, May 20 2006 - 01:12 AM WIB
?The government already owns about 10 percent of the company and is in the process of acquiring another 10 percent,? Energy and Mineral Resources Minister Purnomo Yusgiantoro said Friday.
He added that his ministry had given the option to the local administration in Papua, where Freeport operates the world?s largest gold mine, to purchase the shares in the company that are to be divested by PT Indocopper Investama.
Freeport is 81.28 percent owned by Freeport-McMoran Copper & Gold Inc, 9.36 percent by the government and 9.36 by PT Indocopper Investama.
?Since the government cannot afford to buy the shares, which are worth between Hp 9 trillion (US$979.86 million) and Rp 10 trillion, we offered them to the Papuan administration some time ago during the late governor Solossa?s term,? Purnomo told reporters after opening a discussion on Freeport at his ministerial offices.
?We haven?t received any response from the administration. However, I can assure you that about 20 percent will eventually come into our hands.?
Purnomo said that the government would continue looking for opportunities to increase its shareholding in Freeport, which has been operating since 1967, after reviewing the company?s contract.
The planned evaluation of the Freeport contract comes following a string of sometimes violent protests by local people against the miner. The papuans have urged the government and Freeport to show greater commitment to environmental protection and improving economic development in the country?s eastern-most province.
Purnomo said that in line with the plan to review the contract, the government was currently assessing the company?s overall production levels and mining processes, community development programs, environmental management, and contributions to the state and security forces.
?This assessment, which has been going on for almost two months, will be presented to the public through a series of five discussions every Friday in my ministerial offices, starting today,? Purnomo said.
He added that officials from various government institutions, such as the Energy and Mineral Resources Ministry, Finance Ministry, Environment Ministry, Home Affairs Ministry, Defense Ministry and the Indonesian Military, as well as mining experts, academics and NGOs, would speak during the discussions.
?The discussions are open to the public and their outcome will be used as input for the government in evaluating Freeport?s contract,? Purnomo said.
Freeport spokesperson Siddharta Moersjid said that the company welcomed the open discussions on his company?s performance in order to make it more transparent to the public.
Meanwhile, Freeport disclosed the figures for ore shipments from the Grasberg mine in Papua to rebut accusations that it has underpaid taxes and royalties.
Freeport says it shipped 472,738 metric tons of copper, gold and silver concentrate in the three months to March, said Armando Mahler, deputy president director of Freeport?s Indonesian operations.
?People want us to be transparent, so we are now explaining how much we produce and how much we sell,? Siddharta said at the Friday hearing as quoted by Bloomberg. The figures would ensure that ?people know that we pay all the taxes and royalties required from us.?
Mahler did not give output figures for last year.
Sonny Keraf, the leader of a group of legislators who take an interest in Freeport, said May 11 that government inspections of the mine?s output Were inadequate, possibly allowing underpayments. Freeport denied the charge at the time. (*)