The first of these conditions would be that PT Freeport must be able to benefit Papua and West Papua and also contribute to the development of the mining industry in Indonesia.
Jakarta (ANTARA News) - The government through the Ministry of Energy and Mineral Resources has imposed four conditions that have to be met for the extension of PT Freeport Indonesias mining contract.

"I have consulted with the President and he has shared the conditions that must be met by Freeport (for the extension of its contract)," Energy and Mineral Resources Minister Sudirman Said revealed at a press conference on Thursday.

He added that the first of these conditions would be that PT Freeport must be able to benefit Papua and West Papua and also contribute to the development of the mining industry in Indonesia.

President Joko Widodo also said PT Freeport must increase the use of local raw material, both in the form of goods and services. In relation to this, Sudirman said he had sent 10 state-owned companies to Papua to initiate possible cooperation with the company by the former acting as vendors, contractors or suppliers of goods and services.

The minister stated that PT Freeport spends up to US$1 billion for the procurement of goods and US$900 million on goods and services.

"The third condition is that Freeport must involve local units and building human resources, including encouraging capital market growth," he said.

The fourth condition is that the investment climate in Indonesia must be maintained, not only for prospective investors, but also those who have been in Indonesia, he said.

In lieu of this, PT Freeport has offered to extend its contract until 2021, with an investment of US$18 billion being made in Indonesia.

"We and Freeport have agreed to maintain cooperation with an investment of US$18 billion, which will be executed later under a contract valid until 2021," Sudirman said.

He explained that on October 14, Freeport would offer the contract to the Indonesian government and the government would have 90 days to bargain.

Sudirman also pointed out that PT Freeport Indonesia had ramped up investment, although the contract had not yet expired in preparation for the development of the worlds biggest underground mine, with a depth of 1,300 to 3,000 meters.(*)

Editor: Heru Purwanto
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