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Govt to take full control of Mahakam gas block, Freeport: Pratikno
The government will take over the management of the gas-rich Mahakam block in East Kalimantan and a gold mining site currently controlled by giant gold and copper miner PT Freeport Indonesia in Papua, a minister has said
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he government will take over the management of the gas-rich Mahakam block in East Kalimantan and a gold mining site currently controlled by giant gold and copper miner PT Freeport Indonesia in Papua, a minister has said.
'President Joko Widodo has reasserted that the government has decided that it will take over the management of the Mahakam block,' State Secretary Pratikno said as quoted by Antara in a press release in Jakarta on Monday.
Currently, the Mahakam block is managed by French oil and gas companies Total E&P Indonesie and Inpex Corp. until 2017.
'Meanwhile for Freeport, because its contract will expire only in 2021, the Energy and Mineral Resources Ministry will strive to make sure that Indonesia's ownership there grows in stages,' said Pratikno.
He said a mechanism was needed to make sure that Freeport's fiscal and economic benefits for Indonesia would continue to increase.
The minister further explained that the government was making a breakthrough in the management of mineral resources through the 2014 Mineral and Coal Law, in which it would regulate relations between the state and Freeport.
'The work contract, which has become the basis of the relations, will be changed to a mining business permit; thus Indonesia's position will be stronger,' said Pratikno.
He said that unilaterally lifting Freeport's management over the gold and copper mining site would not solve existing problems.
'Instead, this would lead to new problems in Papua, such as economic disruptions that could cause the people to suffer,' said Pratikno, adding that such a unilateral move would also have political impacts, damage the investment climate and weaken Indonesia's position in the Asia Pacific. (ebf)(++++)
