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Jakarta Post

Contract to be extended to 2041 as Freeport agrees to divest 51% shares

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, August 16, 2017   /   07:30 am
Contract to be extended to 2041 as Freeport agrees to divest 51% shares Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan attends a hearing at the House of Representatives in Senayan, Central Jakarta, recently. (Antara/Puspa Perwitasari)

Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan has said that the contract of gold and copper miner PT Freeport Indonesia will be extended to 2041 as the company agreed to divest 51 percent of its shares to Indonesia’s entities.

“Our law says the contract can be extended by 10 years, but because the company has agreed to divest 51 percent of its shares and to construct smelters, a 20-year contract extension is no problem,” Luhut said as reported by kontan.co.id on Tuesday.

Representatives of PT Freeport Indonesia, a subsidiary of United States-based mining giant Freeport-McMoRan, have been negotiating with government officials about the conversion of its Contract of Work (CoW), signed in 1991, into a Special Mining License (IUPK).

Without a contract extension, Freeport’s contract is set to expire in 2021.

Luhut said the share value of the company would be calculated based on market prices, without taking into consideration the gold and copper reserves in the Papua mining site.

“We know how to calculate the value of shares, which is in accordance with the universal standard. We cannot calculate the amounts of reserves, which are still inside the earth,” said the minister. (bbn)