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Freeport cannot give up rights given in CoW: Adkerson
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The underground mining activities of PT Freeport Indonesia in Tembagapura, Papua, in July. (Kompas Print/File)
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reeport McMoRan president and CEO Richard C. Adkerson has said over the last five years PT Freeport Indonesia had consistently abided by changing regulations in Indonesia.
He said, however, that even though the 2009 Mineral and Coal Mining Law stipulated that the firm’s contract of work (CoW) signed in 1991 was still valid, the government was now requesting Freeport to terminate the contract.
“We cannot just give up our rights that have been given in the CoW,” Adkerson said in a press statement received by The Jakarta Post on Monday, adding that his company employed some 32,000 workers.
(Read also: Indonesia ready for Freeport tribunal)
Based on the CoW, Freeport has invested US$12 billion and is now investing $15 billion to develop its underground reserve, Adkerson said, adding that the government had received $16.5 billion in financial benefits from the operation of the Papua mine in the form of taxes, royalties and dividends since 1991, while Freeport had received $10.8 billion in the form of dividends.
Adkerson said Indonesian law had to reflect legal principles that could be accepted internationally and a contract constituted law for the parties in the contract and this law could not be changed or arbitrarily terminated by one party.
Previously, Freeport said the company could accept converting from a CoW to a special mining license as stipulated in new regulation, but only with a guarantee from the government on the firm’s long-term investment stability, including fiscal and legal certainty as already stipulated in the CoW signed in 1991. (bbn)
