Freeport Ships 750,000 tons Copper Concentrates

TEMPO.CO, Jakarta – After months of not being able to export its output, US-based Indonesian mining company Freeport Indonesia will begin exporting its copper concentrate again today. Freeport Indonesia president director Rozik B. Soetjipto yesterday said the company will ship 750,000 tons of copper concentrate until the end of the year.

This would be Freeport's first shipment since the government imposed a ban on January 12, 2014. In late July, the Indonesian Trade Ministry finally issued a letter of approval for Freeport to continue its copper concentrate exports.

Freeport also gets an export tax reduction of up to 7.5 percent, a reward for agreeing to build smelters. The company has also deposited a US$115-million cash guarantee as a way to show its commitment in Indonesia's smelter development.

Chairul Tanjung, Coordinating Minister for the Economy, said that Freeport's export put Indonesia's trade balance at a surplus. According to Chairul, the export will increase state revenues by US$6 billion by the end of the year.  

University of Indonesia economist Lana Soelistianingsih disagrees. She said the trade balance deficit will only become a surplus if the government allow all CoW and Coal Mining License Work Agreement (PKP2B) holders to export.

Lana also said that re-allowing Freeport's mineral export is a decision that is heavy with political interests. Lana said this will only have a small effect on the Indonesian economy. "Maybe only by US$ 500 million; far smaller than what the Tangguh gas renegotiation could garner," she said.

BERNADETTE CHRISTINA MUNTHE | JAYADI SUPRIADIN | AMIR TEJO