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Jakarta Post

Governor Lukas insists Freeport build smelter in Papua

  • Nethy Dharma Somba

    The Jakarta Post

Jayapura   /   Sat, January 31, 2015   /  10:48 am

Papua Governor Lukas Enembe has remained firm on his position that PT Freeport Indonesia (PT FI) build a smelter in Papua, if not then the company ought to leave the province.

'€œBuilding a smelter in Papua is mandatory, if PT FI fails to do so it must leave Papua and can no longer take the natural wealth of Papua and impoverish the people,'€ Lukas told The Jakarta Post on Friday.

Lukas, who discussed the issue during his meeting with President Joko '€œJokowi'€ Widodo at the State Palace in Jakarta on Thursday, said all the people of Papua opposed PT FI'€™s plan to build a smelter in Gresik, East Java.

He said that Papua could not be developed if all the industries were built outside Papua, including the smelter; PT FI had fully exploited Papua'€™s natural wealth.

Lukas and representatives from regencies encompassing the PT FI concession area as well as customary land owners quickly expressed their objections to Jokowi.

Regarding the construction of the smelter, Lukas said his administration had carried out the tasks expected of it to build roads to the biggest waterfall in the region of Urumuka, Papua, which, if turned into a hydroelectric plant, could generate up to 600,000 megawatts of power.

'€œSo, there is no longer any reason for PT FI not to build the smelter in Papua. Regional administrations have provided land and built road infrastructure to Urumuka,'€ said Lukas.

He added that the provincial administration was currently drawing up a provincial bylaw and a special provincial bylaw that will create legislation on all the resources in Papua, be they forestry, marine or mineral.

'€œThe bylaws are aimed at preventing major companies operating in Papua from taking raw and unprocessed natural resources out of Papua before processing them and exporting them as semi-processed materials,'€ said Lukas.

If PT FI refused to build the smelter in Papua, Lukas said his administration would build the smelter itself with other investors and PT FI would be required to use the smelter.

'€œWe will make a memorandum of understanding [MoU] with PT FI and require it to use the smelter built by the Papuan provincial administration and investors,'€ said Lukas.

Papua legislative speaker Yunus Wonda, who joined Lukas'€™ entourage to meet Jokowi, said PT FI had raked in huge profits from Papua and it was time to do something that had wide benefits for the people of Papua.

'€œIf PT FI has the heart to develop Papua, it must build the smelter in Papua,'€ he said.

Regarding Jokowi'€™s response, Lukas said the president totally agreed with his thoughts

PT FI, a subsidiary of US copper giant Freeport-McMoRan Inc., signed an MoU to renegotiate its work contract as the government tries to adjust several terms in the contract to accommodate regulations under the 2009 Mining Law.

Under the MoU, which highlights Freeport Indonesia'€™s principal agreement to amend its contract, the company agrees to comply with the law, including the obligation to establish a smelter in Indonesia to process its concentrates.

Considering infrastructure facilities and the availability of power, the company has picked Gresik as the location of the new smelter.

The company has also deposited US$115 million as a guarantee that it will finish developing the smelter.

The guarantee has convinced the government to allow the company to continue exporting copper concentrate until 2017

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