Timika, Jubi – The Mimika Regency administration will, for the first time, receive a net profit payment from gold and copper miner PT Freeport Indonesia since the conversion of the contract of work (CoW) to a special mining permit (IUPK) in 2018.
Mimika’s Regional Revenue Agency head Dwi Cholifah said that through the IUPK scheme, the Mimika administration was one of the shareholders of Freeport along with the Papua government and the Indonesian government. Therefore, the Mimika administration will receive a payment of Rp 300 billion (US$ 21 million) from the share of Freeport’s profit in 2020.
“This is in accordance with Law No. 3/2020 on Mineral and Coal mining,” Cholifah said on Tuesday, June 15, 2021.
According to the law, Freeport, which operates the Grasberg mine in Timika, the capital of Mimika, must share 4 percent of its net profit to the central government and 6 percent to the Papua government. Of the 6 percent paid to the Papua government, 2.5 percent is for Mimika as the producing area, 2 percent for districts in Papua, and 1.5 percent for the Papua provincial government.
“The Rp 300 billion is 2.5 percent of the total share paid to the Papua government,” Cholifah said.
Cholifah confirmed that ever since the conversion of mining permits into IUPK in 2018, this was the first time the Mimika administration would receive a profit payment from the company. In 2019, Freeport and the Ministry of Energy and Mineral Resources reported that the mining company had not received a net profit so it could not pay dividends to shareholders.
Cholifah said that the share received by the Mimika administration would be even greater if the profits obtained by the Freeport were greater.