Freeport Gets Special Mining Permit
13 August 2014 15:42 WIB
TEMPO.CO, Jakarta - Susilo Siswoutomo, Deputy Minister of Energy and Mineral Resources, said the government does not extend mining permits in the form of Contract of Work (CoW). However, he said, the government can issue special mining licenses, called the IUPK, in this case to US-based miner Freeport Indonesia.
"This permit must be filed two years before the initial contract expires," he told Tempo yesterday.
Freeport will be granted an IUPK after the company finalizes its divestments. There are some clause differences between a CoW and an IUPK. In CoWs, agreement clauses are determined by parties involved in mining projects. While in IUPKs, the government has full authority to regulate the clauses and give permits to the company operating the mine.
Despite not saying when the IUPK will be given to Freeport, Susilo said that the contract extension should be finished by 2019.
On Monday, Freeport Indonesia president director Rozik B. Soejipto claimed that the company had obtained a new contract from the government. Certainties over the extended contract will be given prior to Freeport's contract expiration on 2021. According to Rozik, Freeports's agreement to construct a smelter became the first step to obtain a contract extension.
By 2019, said Rozik, Freeport's total investment will reach US$8 billion. The value will increase to US$15 billion by 2041 if the company indeed gets a contract extension. With the fund, Freeport will be able to work on underground mines, a project that has long been planned by the company based on the depleting mineral reserves that can be exploited on ground level. "That's why what wee need now is certainty," he said.
AYU PRIMA SANDI | JAYADI SUPRIADIN
