Freeport's mining area (Jubi)

Freeport Made No Progress on Smelter Project

Freeport's mining area (Jubi)

Freeport’s mining area (Jubi)

Jayapura, Jubi/GeoEnergy – PT. Freeport Indonesia has made no progress in materializing the MoU with the Indonesian Government concerning to smelter project.

The smelter is very important at that point. Besides the fact it is the Mining Law’s mandate, its presence would definitely become an added value for Indonesia because it could clearly confirm the total number of gold and other minerals transported by PT. Freeport to outside of Indonesia.

“It should be an assumption that PT. Freeport has cheated Indonesia on the report of minerals transported from Papua, because we never knew the exact number of mineral exploited and transported by Freeport. Thus, the presence of smelter becomes very crucial to immediately be implemented. Do not cover this obligation by exaggerating the information that Freeport has given back the block area rich of gold to Indonesia. Do not provide the public with manipulative issues. The area handover was referred to the Mining Law. So their obligation to build smelter shouldn’t be covered with this news,” the Executive Director Energy Watch Indonesia Ferdinand Hutahaean on official statement last week.

He further said the government through the Ministry of Energy and Mineral Resources should have made a priority on this case. Do not manipulate the information to the public. After decades we never took the real benefit from Papua and now under the President Jokowi, it should be a significant change.
“Jokowi must warn the Ministry of Energy and Mineral Resources for not being constraint to Freeport while its export permit would be ended in the end of this month. The Minister of Energy and Mineral Resources should give serious attention on this case, even though the permit must be extended in the end of this month, it is important that Freeport should be charged with 15% export tax on concentrate export,” said Hutahaean.


Meanwhile, in connection with Freeport’s operational management, the President Director of PT. Freeport Indonesia Maroef Sjamsoeddin recently told reporters in Jakarta that PT. Freeport Indonesia has agreed about the increase of royalty on mining commodity, namely copper from 3.5 % to 4%, gold from 1% to 3.75% and silver from 1% to 3.25%.

Additionally, Freeport also agreed about share divestment that increase from 9.36% to 30% and expected the divestment is conducted through initial public offering (IPO). Even, the utilization of domestic goods and services would also be increased from 71% to 90%. Freeport also claimed the 35% corporation income tax of net profit should be charged is remain the same while Indonesian corporations should pay 25% of income tax according to the Income Tax Law.

According to Maroef, during 42 years operating in Indonesia, Freeport has given direct and indirect contribution to Indonesia and Papua. In the period of 1992-2014 or 22 years operating, Freeport’s direct contribution to Indonesia was USD 15.7 billion and its indirect contribution reached USD 29.5 billion.

“Direct contributions are including taxes, royalties, dividends and additional costs. Meanwhile the indirect contributions are including salaries and domestic purchasing fees, regional development and domestic investment. Taxes and other retributions received by the government from Freeport for 22 years are USD 12.8 billion, dividends USD 1.3 billion and royalties USD 1.6 billion,” revealed Maroef. (*/rom)

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