T

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.

'€œPresident Joko [Jokowi] 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.

'€œMeanwhile 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.

'€œThe 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.

'€œInstead, 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.