I

n reference to the article entitled 'Freeport wants to stay informed of investigation' (The Jakarta Post, June 8,
p. 13), we would like to clarify some points and provide context to certain information in the article.

A paragraph in the article reads: 'Till now, Freeport has refused to increase its royalty payments and to have its working areas reduced to 25,000 hectares. It has also refused to build smelters to process ores locally, despite the 2009 Mining Law, which will ban the export of unprocessed mineral ores starting in 2014.'

With regard to royalty payments we would like to clarify the following.

First, PT Freeport Indonesia will agree to increase the rate of mining royalties to the level set in Government Regulation No. 9/2012, with the royalty rate for copper at 4 percent, gold at 3.75 percent and silver at 3.25 percent.

Second, to date, the renegotiation of the size of operational area as an item in the contract of work with the government of the Republic of Indonesia is still under way.

Third, the treatment/refining process of mineral concentrate at PT Freeport Indonesia is conducted by another company that owns a copper smelter plant. In Indonesia, it is carried out by PT Smelting Gresik located in Gresik, East Java. PT Smelting Gresik mineral concentrate smelter is a form of PT Freeport Indonesia's support as a part of the implementation of the contract of work with the government of Indonesia.

Daisy Primayanti
VP Corporate Communications
PT Freeport Indonesia
Jakarta