TEMPO.CO, Jakarta - The government continues to push PT Freeport Indonesia into switching its Contract of Work (CoW) to a special mining permit (IUPK).
Finance Minister Sri Mulyani Indrawati said that Freeport has done more harm than good by refusing to accept the government’s offer and threatening to take the dispute to international arbitration.
“Freeport is a public company. If it stops [operating], its share [price] will fall,” Sri said in Jakarta yesterday.
As of now, Freeport is barred from exporting its copper concentrate due to the lack of export recommendation. The government will only issue export recommendation if Freeport agrees to switch its CoW to IUPK.
According to Sri, export and production halt will harm the subsidiary of U.S.-based Freeport McMoRan Inc. The government, she said, must consistently impose the Mineral and Coal Mining Law and Government Regulation No. 1/2017 on change of status of mining management.
Therefore, the Finance Minister said that the government is offering a 6-month transitional period. “The best solution is to maintain mutual interest. It’s important to Indonesia, Papua and Freeport,” Sri said. The government, she said, will also explain the state of affairs to investors to calm them down.
On Monday, Freeport-McMoRan CEO Richard Adkerson said that he will take Indonesia to international arbitration for breaching the provisions in its CoW, which was last extended in 1991.
According to him, Freeport reserves the rights to export copper concentrate, yet the Energy and Mineral Resources Minister has unilaterally canceled it since January 12. Adkerson has threatened to file a lawsuit if no agreement was reached within 120 days.
Energy Minister Ignasious Jonan said that he was not that fussed about the deadline. He has instead said that Indonesia could also file a lawsuit against Freeport. The Coordinating Minister for Maritime Affairs Luhut Pandjaitan expressed that Freeport’s operational permit will end once the CoW expired in 2021.
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