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Jakarta Post
The Jakarta Post
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Government refuses to step back in Freeport dispute

  • Viriya P. Singgih
    Viriya P. Singgih

    The Jakarta Post

Jakarta | Wed, March 15, 2017 | 07:29 am
Government refuses to step back in Freeport dispute Members of National University Student Movement (GMNI) hold a rally in front of Freeport Indonesia's office on Jalan Rasuna Said, Jakarta, on Feb. 24. (JP/Dhoni Setiawan)

The government has stated that it will not take a step back in its dispute with gold and copper miner PT Freeport Indonesia, reiterating that the company must abide by the rules on contract conversion and share divestment.

Both parties officially started negotiations to find a settlement on March 8, in which the government is represented by officials from the Energy and Mineral Resources Ministry, including secretary-general Teguh Pamudji, while Freeport Indonesia is represented by directors Clementino Lamury and Tony Wenas.

“Today, we have clearly explained our stance to them [Freeport] that we are still in a position that demands they convert the contract of work [CoW] into a special mining license [IUPK],” Hadi Djuraid, Energy and Mineral Resources Ministry spokesperson, said following a two-hour meeting with Clementino and Tony on Tuesday in Jakarta.

(Read also: Indonesia prepares company to manage Freeport)

Hadi also said the company must divest 51 percent of its shares as mandated in Government Regulation (PP) No. 1/2017. “It is clearly stated in the PP. Hence, we can’t take a step back. We have to move forward with it,” he said.

Freeport Indonesia has rejected the idea of contract conversion and divesting 51 percent. The company has also stated that it might take the case to international arbitration if it cannot reach an agreement with the government within 120 days, starting from Feb. 17.

The United States-based mining giant Freeport McMoRan currently owns 90.64 percent of the company, while 9.36 percent is owned by the government. (ags)