Jakarta, April 12 (Antara) - The government will not extend the work
contract of US-based gold and copper mining firm PT Freeport Indonesia
prior to 2019, though the company is currently seeking an extension of
its contract.
"There has been no decision now regarding the extension of Freeport
Indonesia because the contract can only be extended two years before it
expires," Director General of Mineral Resources and Coal R Sukhyar said
in Jakarta on Friday.
The work contract extension signed by Freeport and the government in
1991 will expire in 2021, resulting in Freeport only being able to
propose an extension in 2019.
Rumors suggested that Freeport's work contract would be extended, along
with its revisions, following the enacting of a law which requires all
mining firms to build smelters.
The law, Law No.4/2009 on Mineral and Coal Mining, also bans the
exports of unprocessed mineral ore. Due to this new requirement, all
contracts for mining firms have to be revised.
"We are
negotiating on six points of revision in the work contract, but none of
the six points are about contract extensions," stated Sukhyar.
Article 169 of the law stipulates that contracts of companies holding
both mineral mining permits (KK) and coal work contract licenses (PKP2B)
--which had been effective prior to the issuance of Law No.4/2009--
will remain in force until its expiry date. The provisions contained in
the KK and PKP2B articles must be adjusted to the law through
negotiations, noted officials.
The six points consisted of construction smelters by mining firms,
reduction of mining areas, the change of contracts into mining business
licenses (IUP), the increase of royalty payments for the state,
divestment and the use of local contents in the mining services.
The government has set a target to finish amending all contracts of
mining companies before October this year, as part of its efforts to
comply with Law No. 4/2009 which bans mineral ore exports.
Law No.4/2009 banned raw mineral exports as of January 12, 2014,
requiring companies in the mining business --both mineral mining and
coal mining, and those which export raw minerals-- to amend their
contracts.
"All companies holding mineral mining permits (KK) and coal-contracts
for work licenses (PKP2B) should have signed contract amendment
agreements before the end of President Susilo Bambang Yudhoyono's
administration term in October," Minister of Energy and Mineral
Resources Jero Wacik stated last month.
Jero Wacik noted that all 112 holders of KK and PKP2B permits are
expected to sign contract amendment agreements before October as part of
the efforts to implement the law. Under the law, mining companies are
required to process minerals inside the country before exporting them.
According to Director General Sukhyar, Freeport has agreed to
new regulations on mining areas, gold royalty payments of 3.75 percent -
previously set at only one percent - the use of local content and the
obligation to build a smelter. But it has not yet agreed to the
divestment regulation.
"This still needs negotiations," Sukhyar added.
On the construction of smelters, Freeport earlier proposed a
cooperation through a public private partnership (PPP) scheme.
"Freeport
wants to follow Law No.4/2009, but for the construction of smelters it
offers a PPP scheme. Freeport is to inject funds while we provide
incentives," Chief Economic Minister Hatta Rajasa said.
Further, Hatta denied rumors that Freeport's work contract extension were included in the negotiations.
The giant copper and gold mining company from the US has submitted an
application for the extension of its contract for 20 years, or 2041,
citing the assurance of its receiving a return on its investment.
Freeport is preparing an investment of US$16 billion to develop a deep
ore mining zone (DOZ), seeking a return of its investment after 2021.
"There has not been any extension, as some strategic issues are still
to be discussed by the new government," he explained here on Friday,
referring to the change of government to occur in October.
He clarified that renegotiation of the contract was not urgent and not a
priority of the current government, as the contract's expiration is
still years away.
"It is wrong if it is not settled. But is it an urgent thing to do or
not if the contract is to expire only in 2021? If it is not, let the
new government deal with it or decide whether it will be concluded or
extended," he asserted.
The same concern was also raised by Energy and Mineral Resources Deputy
Minister Susilo Siswoutomo. "Based on the Government Regulation, the
application for the extension of its operation could only be submitted
two years before the end of its contract."
"So, if the contract
expires in 2021, then they may submit the application in 2019, at the
earliest," the deputy minister said on Friday.
Article 45 of Government Regulation No 23 of 2010 on minerals and coal
mining activities stipulates that applications for contract extensions
must be submitted two years, at the earliest or six months at the
latest, before the contract expires.
The Deputy Minister denied that the government had extended the mining
contract of PT Freeport. "There is no extension yet, nor has there been
lobbying about it, so far. We will follow the procedures based on the
government regulation in force," he asserted.
Susilo Siswoutomo explained that PT Freeport Indonesia could submit an
application for extension of its contract in 2019, at the earliest.
Freeport, he pointed out, must follow the provisions as stipulated in
the government regulations.
The current working contract of PT Freeport Indonesia was signed in 1991 and is scheduled to expire in 2021.
The Indonesian government signed its first work contract with Freeport
McMoran Inc on April 7, 1967, with exclusive mining rights on a 100 sq
km tract in Ertsberg, Papua. The contract was extended on December 30,
1996.
From 1992 to 2013, the Indonesian government received US$15.2 billion,
including US$9.4 billion in corporate income tax, US$3 billion in
workers' income, regional and other taxes, US$1.5 billion in royalty
payments and US$1.3 billion in dividends.
However, PT Freeport Indonesia, which has large copper and gold mines
in Papua, would not pay dividends from its profit in 2013.
No shareholder, including its principal FreeportMcMoRun Copper &
Gold or the government, will receive dividends, company vice president
Daisy Primayanti said in a press release late last month.
"There are a number of factors behind the decision, such as a decline
in sales of copper and gold because of the introduction of lower grades
of ore, disturbances in mining operations, falling commodity prices in
the world market and the use of some US$1 billion in cash to support
underground mine investments in 2017," Daisy said.***2***
(A014/INE/S012)
(T.A014/A/BESSR/Suharto) 12-04-2014 |
Tidak ada komentar:
Posting Komentar