Coordinating minister for maritime affairs Luhut Binsar Panjaitan stated that regulations, such as 51 percent divestment and smelter development, must be followed.
"Freeports contract has ended. Yesterday, I met the US secretary of trade, and he asked me about Freeport. I explained that the current issue was Freeports expiration of contract," he stated.
Luhut noted in his explanation that it was like a contract for a house, which can be extended only if the conditions set by the owner are met.
"The analogy is you rent my house 20 or 50 years ago. The contract is now over. I can decide whether to give you an extension or give it to my children or grandchildren. However, Indonesia would not do it. We still wish to give contract extension to Freeport, provided it meets our conditions," he remarked.
The former minister of political, security and legal affairs said the US mining company must adhere to the Indonesian governments regulations.
"If you do not do it, we will not give an extension. Remember, we are a sovereign country," he asserted.
The Indonesian government, through Government Regulation Number 1, 2017 regarding the fourth amendment on Government Regulation Number 23, 2010 on implementation of coal and minerals mining business, has set a number of conditions for the extension of contracts, including that work contract holders must change their companies into mining business permit companies and special mining business permit companies and declare willingness to build smelters within five years.
Other condition is that they are also required to divest up to 51 percent of their shares.(*)