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Jakarta Post

Mimika warned not to repeat the case of Cepu block

  • Viriya P. Singgih

    The Jakarta Post

Jakarta   /   Wed, March 8, 2017   /  04:50 pm
Mimika warned not to repeat the case of Cepu block A vehicle passes through gold and copper mining company's PT Freeport Indonesia’s (PTFI) mining area in Grasberg, Mimika, Papua. (JP/Nethy Dharma Somba)

Former Coordinating Maritime Affairs Minister Rizal Ramli has warned the Mimika administration in Papua to be cautious following its aspirations to get shares in gold and copper mining company PT Freeport Indonesia, especially considering the previous case of the Cepu block in Bojonegoro, East Java.

Mimika administration in Papua has demanded 10 to 20 percent of shares in Freeport Indonesia, a subsidiary of the United States-based mining giant Freeport McMoRan, in return for the company’s land compensation for operating in the region for the past half-century.

“I support the Mimika administration’s plan as the company has never paid compensation for the land used,” Rizal said recently in Jakarta.

(Read also: Workers urge government to settle dispute with Freeport)

However, he said the administration should not repeat the mistake made by Bojonegoro administration in the case of the Cepu block, which is operated by US oil and gas company ExxonMobil Indonesia.

The Bojonegoro administration has 4.46 percent of participating interest in Cepu block through subsidiary PT Asri Dharma Sejahtera (ADS), which it has made a revenue-sharing agreement with PT Surya Energi Raya (SER) owned by ruling NasDem Party chairman Surya Paloh. Under the agreement, SER has a portion of 75 percent, while only 25 percent is taken by ADS.

“Because the Bojonegoro administration had no money to buy the shares in Cepu block, it made an agreement with a company. As a result, people in Bojonegoro get nothing out of it,” Rizal said. “Don’t let the same thing happen in the case of Freeport Indonesia.” (bbn)

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