Recommendation on Freeport and Mahakam in a Month


Jakarta, Jubi/Antara – Energy and Mineral Resources (ESDM) Minister Sudirman Said has said he would submit recommendations on the operations of the Mahakam gas block and copper and gold mining PT Freeport Indonesia to President Joko Widodo (Jokowi) in April, 2015.

“In line with the instruction of the president, as this involves large investment, the decisions on the Mahakam block and Freeport have to be made faster with detailed studies. We are set to submit the recommendations to the president in a month from now,” Sudirman said here on Monday (16/3/2015).

He said state oil company PT Pertamina is ready to invest US$25.2 billion in the Mahakam block and Freeport to make new investment of around US$17.3 billion in its copper and gold mines in Papua.
He said he would continue coordination with the chief economics minister and other related agencies in drafting the recommendations.

As for Mahakam, he said, he was confident there would be no problem in the transitional period ahead of the handing over of the operation of the gas block in 2017 from the present operator Total E&P Indonesie to PT Pertamina.
“So far talks have been progressing well since November, 2014. The government has decided and all parties are required to be cooperative. I am confident the transition would be progressing smoothly . There is no hard feelings,” he said.

He said the government wants Pertamina to be involved immediately in Mahakam operations.
“Pertamina is ready so is Total,” he said.


As for Freeport, the government is studying decision to be made to ensure operation of its mines after 2021, he said He said the government wants Freeport to give greater benefit for the state and Papua after extension of contract.
“Decision on the continuation of the operation becomes difficult as it could only be made in 2019. Therefore, other ways would be sought whether to use the IUPK (special mining business license ) system,” he said.

The contract of PT Freeport for its mining operation in Papua will expire in 2021.
The government has made a final decision on Mahakam block but extension is being studied for Freeport contract after 2021.  (*)

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