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Wednesday, 12 February 2014 - 11:39 WIB

Government Urged to Review Mineral Export Tax Law

Freeport's Union and Management when signed a MoU (Jubi)

Freeport's Union and Management when signed a MoU (Jubi)

Freeport's Union and Management when signed a MoU (Jubi)

Freeport’s Union and Management when signed a MoU (Jubi)

Timika, 11/2 (Jubi) – The owner of the customary land tenure in the area of PT. Freeport Indonesia urged the central government to review the mineral export tax regulation, saying it was a burden for the company but a threat to Papuans’ livelihoods.

“The company has brought education and development to our society. We want the government to reconsider it. Don’t let us become victims,” said the land tenure right owner, Silas Natmike, on Tuesday (11/2) at Timika.
The government began implementing  the 2009 mining tax regulation in January. Under the regulation, the tax for copper concentrate exports has been raised to 25 percent from 20 percent, and will gradually go up to a maximum 60 percent by the end of 2016.
He said he hoped a recent visit by the leaders of the provincial legislature (DPR Papua) to Freeport would take bring about change and that the company can operate without being burdened by high export tax.
“After all, many Papuans’ lives are depending on this company,” Natmike said.
Meanwhile, the vice chairman of Papua Brotherhood, Simon Morin, said due to the high export tax, the company would not able to export its copper concentrates. In addition, building a smelter is not easy either because it requires supports of good infrastructure, sufficient electricity supplies, seaport and industrial areas, he said. He added that the existing smelter in Gresik can only absorb 40 percent of Freeport’s production.
If the company is burdened with the export tax regulation, then it can only produce to fulfill the demands of Gresik smelter.
Meanwhile the current mine productions have begun to decrease due to the high taxes. If the situation does not change, the company must cut the number employees and this will have a great impact on the economy of Mimika regency.
Morin said production of normal concentrate could reach 2 million tons and more in a year. One million ton is produced in Gresik, and the rest is exported.
However, due to the export tax regulation, the production has dropped to 30,000 tons per day from 200 thousand tons per day.
“The government must consider 30,000 workers. Even though it is the government’s policy, it should be adopted without sacrificing the people,” he said.
“The government should not look at 30,000 employees as just a number, they are part of thousands of people who desperately need employment in order to support their families,” he said.
The DPR Papua Speaker Deerd Tabuni recently visited the mining area of PT Freeport Indonesia.
The visit followed a reduction in production at Freeport that has caused the buildup of materials due to the increased of export cost.
“The purpose of our meeting is to see the mining area of PT Freeport Indonesia. We saw that this company is remarkable. Therefore the government must treat  PTFI differently from mining in other areas. Why I say that? Because it is very vulnerable in terms of nature,” said Tabuni after the meeting with the Chairman of Papua Brotherhood, Simon Morin and the customary land owner Silas Natkime.
He said the implementation of Mineral Export Tax Regulation No. 4 2009 is severely affecting PTFI.
Therefore, further he said, the central government should refer to Regulation on Special Autonomy 2001  and 1945 Constitution 45 Article 18 Paragraph 1 and 2 which stipulates that central government should coordinate with local governments managing natural resources.
“We will discuss the result of our mission with the local government, then send an official letter to the president asking him and his ministers to review the export tax,” he said. (Jubi/Eveert/rom)

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