Export permit for Freeport temporarily valid: Energy minister

Jakarta (ANTARA News) – Energy and Mineral Resource Minister Ignatius Jonan stressed that the government has never issued a temporary special mining business permit (IUPK) but a temporary export permit for PT Freeport Indonesia.

“It is a temporary export permit, because we will review it every six months,” Jonan said after a meeting with President Joko Widodo at the Presidential Palace here on Thursday.

The minister disclosed that Freeport had initially rejected the change from Contract of Work (CoW) to IUPK. But after a three-month negotiation, the US-based mining firm accepted the contractual change.

“If they reject the change from CoW to IUPK, they cannot make any export,” Jonan stated.

According to Jonan, mining companies that hold CoW would not necessarily change the contract to IUPK if they already have smelter facilities.

“In fact, it would not be necessary if the contract holder has constructed smelter facilities. It is okay to continue the CoW until it expires,” Jonan added.

Under its CoW, Freeport can still continue its mining activities but cannot export the product, Jonan asserted.

“Finally (Freeport) has agreed on IUPK. We give them an eight-month permit from Feb, or six months from now,” Jonan noted.

Freeport Indonesia will be allowed to export 1.11 million wet metric tons (wmt) of copper concentrate in a year.

The permit will be evaluated after the first six months, taking into account the progress of smelter construction in Gresik, East Java.

“We will check every three months, and we will send independent team to verify the progress,” Jonan added.

The negotiation with Freeport would be continued through the next six months to discuss issues on taxation and retribution he remarked.

“After six months, if they do not build any smelter and there is no progress on the smelter, we will revoke the export permit. The export permit is temporary but not for the IUPK,” Jonan reiterated.

Source: Antara News