"We are committed to staying in Indonesia. This is an important resources for Freeport, also an important object for the government of Indonesia and Papua," says President and CEO of Freeport McMoRan Inc Richard C. Adkerson here on Monday.
PT Freeport Indonesia has large copper and gold mines in the countrys easternmost regions of Papua, but now , the company has stopped operation as it is not allowed to continue export its copper concentrate over contract disagreement.
Richard said the U.S. mining giant had invested US$12 billion and is investing US$15 billion in Indonesia providing jobs for 32,000 Indonesians.
The government of Indonesia also had earned 60 percent of financial benefit directly as a result of the operation of Freeport, he told reporters in a news conference.
Taxes, royalty and dividends paid to the government since 1991 have exceeded US$16.5 billion and Freeport McMoRan had received US$108 billion in dividend, he added.
"The taxes, royalty and dividend to be paid to the government in the future until 2041 is estimated to exceed US$40 billion," he said.
Richard said the company has contributed 90 percent to the economy of Mimika, Papua, adding one third of the economy of Papua is sustained by Freeport business .
"In the remaining contract , Indonesia will receive more than US$40 billion . This asset is too big for us to abandon. What we need is to find a solution and we are committed to continuing cooperation with the government of Indonesia," he said.
He said the operation of the company has been affected after the end of the export license on January 12, 2017.
The company even already stopped operation since February 10 as the company had no place to store up concentrate.
The condition was made worse with the strike by the workers of the Gresik smelter which could only process 40 percent of the concentrate from Grasberg.
"We shut down our factory 10 days ago as there is no storage facility for the concentrate, and we could not exports. We could not continue producing goods we could not exports. As a result we slashed production ," he said.
He said Freeport would launched efficiency and cut costs, including by laying off workers.
"We reduce the number of our expatriate workers . This week we will reduce the number of workers of our contractors . Around 12,000 of 32,000 workers are our director workers," he said.
Richard said he felt sad about the problem, adding the company has no intention of seeking to pile up pressure on the government in order to gain from contract negotiation.
"We do this not because of negotiation with the government but how to make business financially work. We hope there would be a way-out soon," he said.
The government through regulation No. 1 of 2017 extended license for the exports of copper concentrate on a certain conditions including agreement to build smelter in five years and agreement to divest up to 51 percent of the share of the contractor to Indonesian investors .
In addition the company has to comply with the taxation regulation, which could change from time to time. Under the old system the tax did not change until the contract expires.
Freeport, however, refuses to the change in its legal rights it was given in 1991 under contract of work.(*)