Economy Policy

Freeport gets another monthly permit extension

The government has issued another temporary permit extension for gold and copper miner PT Freeport Indonesia (PTFI) as the divestment process of shares from Freeport-McMoran (FCX) to state-owned mining holding company PT Indonesia Asahan Aluminium (Inalum) is still incomplete.

The temporary special mining permit (IUPK) is being issued by the government as the previous temporary permit expired on Sept. 30. PTFI has already had a monthly temporary IUPK since February 2017. The issuance of the permanent IUPK is pending the completion of the divestment process.

Energy and Mineral Resources Ministry mineral and coal director general Bambang Gatot Ariyono said in Jakarta on Monday that the temporary IUPK would take effect on Oct 1 and would end in late October.

Inalum signed last week agreements with United States-based mining giant FCX, a parent company of PTFI, on the purchase of a majority stake in PTFI, which operates the gold and copper mine in Papua.

To conclude the deal, however, Inalum, which represents the government in the talks, needs to settle the payment of US$3.85 billion to FCX and the Rio Tinto Group within six months.

When the deal is completed, Inalum, which represent the Indonesian government, will increase its ownership of PTFI shares from 9.36 to 51.23 percent.

Freeport is also seeking a contract extension to operate the mine for 2 x 10 years after its current contract of work (CoW) expires in 2021.

“Each [period] is conditional and has different requirements. So if they demand an extension up to 2031, we could give it directly, but if they demand up to 2041, it is OK as long as the company can meet the requirements,” he added.

The Jakarta Post

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