TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Negotiations with Freeport took place over two-and-a-half years: Jokowi

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, September 5, 2017   /   06:32 pm
Negotiations with Freeport took place over two-and-a-half years: Jokowi A vehicle passes through gold and copper mining company Freeport Indonesia’s mining area in Grasberg, Mimika, Papua. (JP/Nethy Dharma Somba)

President Joko “Jokowi” Widodo said negotiations between the government and Freeport McMoran had taken place over the last two-and-a-half years before the company finally agreed to allow local companies to own up to 51 percent of its shares, Freeport Indonesia.

“Negotiations were tough and contrary to what people think did not take place over nine months. If we did not persist, we would have only gotten 9 percent,” Jokowi told his supporters in Jakarta on Monday as reported by tribunnews.com.

The divestment agreement with Freeport Indonesia was announced by Freeport McMoran CEO Richard Adkerson on Aug. 29.

Read also: Freeport still in charge of Grasberg mine after divestment

The company also agreed to convert its contract of work (CoW) to a special mining permit (IUPK), build a smelter within the next five years and increase its contribution to state revenue from its Grasberg mine in Papua.

The government agreed to extend Freeport’s operational contract, which would have expired in 2021, to 2041.

In addition to Freeport’s divestment, Jokowi also talked about the takeover of several oil and gas blocks by the government. He gave an example that the government had taken over 100 percent of the Mahakam oil and gas block, which was initially controlled by two foreign companies.

He said the block was now controlled by state-owned energy giant Pertamina. “Is Pertamina ready to manage the block? If not, Pertamina is allowed to seek a partner, but the majority of the shares should remain ours,” he added. (bbn)