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Freeport fails to complete planned smelter progress
Value added output: A worker monitors the mineral flotation process to produce copper, gold and silver concentrates in one of Freeport Indonesia's facilities
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span class="inline inline-center">Value added output: A worker monitors the mineral flotation process to produce copper, gold and silver concentrates in one of Freeport Indonesia's facilities. The dried concentrates are taken to Amamapare port, Papua and shipped to molding factories. (Kompas/B. Josie Susilo Hardianto)
PT Freeport Indonesia has failed to fulfill its planned smelter construction progress and thus the US gold and copper mining giant must keep paying 5 percent export duties and fines, Energy and Mineral Resources Minister Sudirman Said has said.
The company's smelter progress was at only 14 percent of its target, according to the latest report from December 2015. It was far behind a preceding agreement that compelled the miner to reach 60 percent progress in January 2016.
Sudirman said he had discussed the matter with the Fiscal Policy Office (BKF), National Police, Attorney General's Office and Development Finance Comptroller (BPKP).
"The amount of fines is calculated based on the amount that Freeport should have spent to reach the 60 percent smelter progress. We are still estimating the number, and will inform Freeport via letter," he told journalists at a press conference on Wednesday.
The US-based company, Sudirman continued, must respond to the letter within two or three days despite a vacuum of power in its management after Maroef Sjamsoeddin resigned from his position as Freeport Indonesia president director.
"We have yet to receive any official letters from Freeport regarding the resignation of the CEO," Sudirman said, adding that the absence of a new president director must not stop the company from fulfilling smelter construction and shares divestment.
The government currently owns a 9.36 percent share in Freeport Indonesia, while Indocopper Investama (on behalf of Freeport McMoRan) has another 9.36 percent and Freeport McMoRan controls 81.28 percent.
With the latest divestment plan of 10.64 percent of shares at US$1.7 billion, the government's ownership would rise to 20 percent. Sudirman, meanwhile, expected the price evaluation result on Freeport's shares would be available in March.
'The 20 percent ownership is not significant, but at least the government can have more access in management such as controlling the dividends,' he said.
Freeport Indonesia dropped plans to share dividends in the last three years. (ags)(+)
