The government has stressed that the operational license extension for PT Freeport Indonesia; in which end by 2021 is still under discussion by the two parties; the government and the US-company itself.
Issues they discussed all the divestment, taxes, and smelter development.
Deputy Minister of Energy and Mineral Resources, Arcandra Tahar said the government does not yet renew the operating permit for the company. According to him, all the requirement needed still being discussed, but he refused to tell the progress.
“There is no renewal made yet. We optimistic the discussion would result in the best deal for the two. The progress (of the discussion) is not important to report yet. When it completed we would tell it,” said Arcandra in a conference, last weekend, Jakarta.
Arcandra added some requirements the government proposed (divestment, smelter development, and post-mining reclamation guarantee, and taxes that the Ministry of Finance responsible for, are continued to discuss.
On the sidelines of a hearing meeting between PT Freeport Indonesia and the House Representatives Commission VII last time, Vice President Corporate Communication of PT Freeport Indonesia Riza Pratama said the company submitted the renewal permit to the government in 2015, based on the work of contract signed in 1991.
Other than that, the regulation requires the foreign company to divest about 51 percent of its shares until ten years production. The company must also build the smelter until 2022 or five years after the regulation issued, and it obeys the applicable tax conditions.
On the other sides, Freeport wants the certainty of the renewal until 2041 and no change for tax condition before the operation permit end. The reason is, the investment to build the smelter and underground mining which spend lots of funds require the investment certainty and rules.
Meanwhile, for the smelter development, the Director of Centre for Indonesian Resources Strategic Budi Santoso said the smelter development should not give to the mineral company only. It should implement to other mining companies. (Ags)