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Freeport to build new smelter in Papua to fulfill contract extension condition
The government has asked gold and copper miner PT Freeport Indonesia (PTFI) to quickly realize its plan to build a new smelter in Papua as one of the perquisites to extend the firm’s mining permit to 2061.
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Gold mine: President Joko “Jokowi” Widodo (right) speaks with Richard Adkerson (left), director of the Freeport-McMoRan copper and gold company at the Grassberg mine in Mimika during Jokowi’s visit on Sept. 1, 2022. (AFP/Presidential Palace)
T
he government has asked gold and copper miner PT Freeport Indonesia (PTFI) to quickly realize its plan to build a new smelter in Papua as one of the perquisites to extending the firm’s mining permit to 2061.
Energy and Mineral Resources Minister Arifin Tasrif said the extension was based on the consideration that there were still significant mineral reserves in Grasberg, Papua that had yet to be exploited.
“Yes, we could [extend] PTFI’s [operations to] 2061 because the company’s been around for decades and in these terms, there are reserves, how can we terminate the contract and look for other [investors]?” he told reporters in Jakarta on Friday.
Previously, President Joko “Jokowi” Widodo said on Nov. 13 that he expected to finalize the negotiations to raise the government’s stake in Freeport Indonesia by 10 percent and to extend the firm’s mining permit for another 20 years, at the end of this month.
Currently, the government, through state-owned mining holding company MIND ID, controls 51 percent of PTFI’s shares, with United States-based Freeport McMoRan controlling the remaining 49 percent since 2018.
That year, the government tasked MIND ID, previously known as Inalum, to purchase PTFI shares from Freeport McMoRan to increase the state ownership in the gold and copper mining firm.
The talks for the extension occurred despite Freeport’s permit being set to last until 2041, following its last negotiation with the government years ago to extend its operation beyond 2021.
