Minister: Freeport remains committed to invest in RI despite lingering uncertainty

Gold and copper giant PT Freeport Indonesia, a subsidiary of US-based Freeport McMoRan Copper & Gold, remains committed to maintain its long-term investment in Indonesia although the company has yet to obtain certainty over the renewal of its mining contract, which is set to expire in 2021.

Minister of Energy and Mineral Resources Sudirman Said stated Thursday that Freeport expressed the commitment following high level talks with President Joko Widodo and himself.

The Freeport?s commitment to invest about US$18 billion at an underground mine in Papua, the largest in the world, and another $2 billion to develop smelter in East Java, indicates that the company?s contract is likely to be renewed. ?Option to end (the contract) is very little,? Sudirman said as quoted by Bisnis Indonesia.

Freeport is seeking to extend its current mining contract for another 20 years. The company has repeatedly asked the government to allow for an early extension of the contract.

However, based on the existing regulation, miners can only apply for contract extension at the soonest two years prior to its expiry. As has been previously reported, the government is currently in the process of revising the regulation that would allow miners to apply for contract extension 10 years prior to its expiry.

?Freeport has agreed (to maintain long-term investment commitment), and once all have been completed (the new regulation) it will immediately apply (for contract renewal),? Sudirman said.

There has been growing calls at home for the government not to renew Freeport?s contract as the company, which as been operating in Papua since 1967, is seen to have only been exploiting the province, giving only little benefit to the local people and the country. (*)