Ministry issues export recommendation letters for PTFI, AMNT
Friday, February 17 2017 - 04:23 PM WIB
MEMR said in a statement obtained late on Friday that PTFI has been given an export quota of 1,113,105 wet metric tons of copper concentrates under an export recommendation letter valid from February 17, 2017 until February 16, 2018.
Meanwhile, AMNT is given export quota of 675,000 wet metric tons of copper concentrates under an export recommendation letter valid from February 17, 2017 until February 16, 2018.
The ministry said that the two companies are committed to develop the required domestic smelters. It added that the ministry will appoint independent auditors to evaluate the construction progress of the promised smelters every six months. ?If the six-monthly construction progress is not in line with the commitment (they?ve made), the export recommendation (letter) can be revoked,? the statement said.
Export of mineral concentrates including copper concentrates produced by companies such as PTFI and AMNT have been banned since January 12 of this year as stipulated by a 2014 government regulation. But the government last month issued a new Government Regulation No 1/2017 allowing mining firms to resume export of mineral concentrates for another five years under certain conditions including converting their mining permit status from mining contract of work (COW) into special mining business license (IUPK), and commitment to develop domestic smelters within five years.
PTFI and AMNT have agreed to convert their COW into IUPK, but PTFI in particular demanded certain conditions for the conversion notably fiscal conditions in the IUPK that are similar to the ones in the COW regime such as nailed down tax principle. The government, however, has insisted that the tax principle under an IUPK is based on prevailing regulations which can change overtime depending on the regulations, not based on nailed-down principle.
To help resolve the lingering dispute over the terms of the IUPK, and after PTFI started suspending operation at its underground mine in Papua last week due to inability to resume export, Minister of Energy and Mineral Resources Ignasius Jonan then issued Ministerial Regulation No 15/2017, described as a ?transitional ruling? to allow companies such as PTFI to resume export of concentrates while the government and the firms resolve their differences over the terms of the IUPK, hopefully to be reached within six months. According to chapter 8 of the new ministerial regulation, the terms of the IUPK of mining firms such as PTFI are still the same as the terms set under the COW regime including a nailed-down tax principle.
PTFI applied for the export recommendation letter with the ministry on February 16, while AMNT applied for the letter on February 17, the ministry statement said.
Editing by Reiner Simanjuntak