PT Freeport opposes new requirements for export: Source

By Godang Sitompul

Courtesy of Freeport

Gold and copper giant PT Freeport Indonesia, a local subsidiary of US-based Freeport McMoRan Copper & Gold Inc, is said to have opposed new requirements set by the government under a planned new policy which is expected to allow miners to continue export of mineral concentrates.

According to existing government regulation, export of mineral concentrates including copper concentrates produced by PT Freeport will no longer be allowed starting Thursday (January 12) as miners have been required to develop domestic smelters. But to date, none of the smelter projects have made significant progress.

The government, however, is likely to allow miners to continue export of mineral concentrates to avoid negative impact to the economy and state coffer, through the revision of Government Regulation No 23/2010, which Minister of Energy and Mineral Resources Ignasius Jonan said Tuesday will be completed this week. Jonan said that under the new regulation, miners wishing to continue export of mineral concentrates must first convert their mining contracts of work into IUPK special mining licenses and must also pay export tax.

A source told Petromindo.com on Tuesday that PT Freeport has protested the new requirements saying that conversion of the mining contract into IUPK must be based on mutual agreement between the government and the company, and that the IUPK does not ensure legal and investment certainty for the company.

The source added that imposing export tax on the company will also only hamper the financing and development of the required domestic smelter.

Elsewhere, the source said that while under the planned revision of Government Regulation No 23, mining companies will be allowed to apply for contract extension five years prior to their expiry period, it would not provide certainty for the company if the approval/rejection to the request is made near the expiry period of the contract.

Editing by Reiner Simanjuntak