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Three points not open to negotiation with Freeport, official says
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A vehicle passes through a PT Freeport Indonesia (PTFI) mine in Grasberg, Mimika, Papua. (JP/Nethy Dharma Somba)
I
ndonesia will never give in to copper and gold miner PT Freeport Indonesia over three specific points during negotiations with the firm, namely conversion of the contract of work (CoW) to a special mining license (IUPK), smelter construction and 51 percent divestment, an official has said.
“What can be negotiated is how to implement them,” said Hadi M. Djuraid, a special staff member of the energy and mineral resources minister, in a statement on Thursday.
He responded to criticism about the government agreement to provide Freeport with an eight-month concentrate export license, although the negotiations were still taking place.
He said during a press conference on Feb. 10 that Freeport CEO McMoran Richard Adkerson had rejected the conversion of the CoW into an IUPK, paying export tariffs on concentrate and divesting 51 percent of its shares to Indonesian entities, but Adkerson agreed to negotiate it in 120 days.
Hadi stressed that the negotiations began with the conversion of the CoW into an IUPK because it made social and economic impacts on the people in Papua, following the end of the mining operation in the province.
“During the negotiations, Freeport agreed to accept an IUPK, but demanded the extension of the negotiations from six to eight months [since February],” said Hadi.
The remaining six months would be used to negotiate over investment stability as demanded by Freeport, Freeport operational continuity and the divestment, he said, adding that the smelter construction will be evaluated within six months and if the progress was insignificant the export recommendation would be revoked. (bbn)
