World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 


Indonesia: Freeport and Government Conclude Deal

Freeport and Government Conclude Deal

by Rangga Prakoso | Jakarta
April 7, 2014

http://www.thejakartaglobe.com/business/freeport-government-conclude-deal/

R. Sukhyar, director general for coal and mineral resources at the Ministry of Energy and Mineral Resources, announced on Monday that the government had reached a conclusion in the talks of renegotiating a contract with Freeport Indonesia.

Freeport Indonesia is one of the holders of a contract of works. The government is seeking to negotiate new terms as a consequence of the 2009 Mining Law.

Sukhyar said that both Freeport and the government had agreed on the six points being negotiated in the talks, namely an added-value obligation, a reduction in the concession area, local content requirement, a higher royalty rate, divestment obligation and a new contractual period.

“All has been agreed, we just need to amend the contract,” he said.

Sukhyar said Freeport agreed to refine all of its processed copper output — known as copper concentrates — domestically starting in 2017.

Freeport owns the rights to develop and exploit the Grasberg mine in Papua, the largest gold mine and the second-largest copper mine in the world.

The miner currently refines 30 percent of its copper concentrates at a smelting facility in East Java and had agreed to supply the remainder to two new facilities that will be built by state-controlled miner, Aneka Tambang, and Indosmelt.

Sukhyar said Freeport had also agreed to cut its concession size to 127,000 hectares from 212,000 hectares even though some of the returned land may hold gold reserves.

“Actually, they only need 10,000 hectares for exploitation as they have gone underground,” he added.

Furthermore, Freeport had agreed to comply with the regulation on the new royalty rate for copper, gold and silver with 4 percent, 3.75 percent and 3.25 percent, respectively, Sukhyar said.

The mining giant also agreed to divest 30 percent of its shares to local entities until the end of its contract in 2021, Sukhyar said, adding that the central government will become priority buyers for the stake, followed by the regional governments and the private sector.

“If it [the share] is being offered to the government then [the valuation] will not be based on the market price but on replacement cost. The cost already incurred is the amount we will pay,” he added.

The development would certainly give a massive boost to the government’s efforts to take more benefits from the country’s mineral resources as Freeport is the largest miner renegotiating new terms.

Freeport had previously stated that it wants another 20-year extension on its contract and its compliance with the government’s terms may grant them their wishes. Freeport Indonesia planned to invest $17 billion to develop its Grasberg mine until 2041.

ENDS

© Scoop Media

 
 
 
 
 
World Headlines

 

Gordon Campbell: On The Aftermath Of Brexit

Be careful of what you ask for. Now that it has woken up from its Brexit victory hangover, is Britain acting as if it has just won the World Cup? Hardly. More>>

ALSO:

UK Labour Statement: The Shooting Of MP Jo Cox

Jeremy Corbyn MP, Leader of the Labour Party said: “The whole of the Labour Party and Labour family - and indeed the whole country - will be in shock at the horrific murder of Jo Cox today. Jo had a lifelong record of public service and a deep commitment to humanity." More>>

ALSO:

Wellington.Scoop: Rainbow Colours On MFC In Sympathy For Florida Killings
Wellington’s Michael Fowler Centre will be lit in colours of the rainbow Monday as a gesture of support for the LGBTI victims of the Pulse nightclub attack in Orlando, Florida. More>>

ALSO:

Gordon Campbell: On How Obama’s Supreme Court Choice Says Everything (Bad) About His Presidency

Nothing has epitomised the presidency of Barack Obama quite like his Supreme Court nominees. Time and again, Republican presidents will blithely nominate right wing ideological extremists (Antonin Scalia, Samuel Alito, Clarence Thomas) who only sometimes misfire and turn out to be liberals in disguise (David Souter). Yet Obama has consistently skipped over the judicially qualified liberals and gone for a succession of centrists... More>>

ALSO:

Turkey: UN Secretary-General On The Terrorist Bombing In Ankara

The Secretary-General condemns the terrorist attack in Ankara earlier today. According to the latest reports, the explosion in the Kizilay district killed and wounded dozens of people. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
World
Search Scoop  
 
 
Powered by Vodafone
NZ independent news