Government to revoke Freeport license over failure to build smelter

Jakarta (ANTARA News) - Indonesias Energy and Mineral Resources Ministry would revoke the concentrate export license for PT Freeport Indonesia, if the giant mining company failed to finish the construction of the mineral smelter facility within five years.

The ministrys secretary general Teguh Pamudji said here on Wednesday that the government would conduct six-monthly evaluation on the development of the smelter.

"Regarding the sanction, there is a discourse from the Justice and Human Rights Ministry to control the development progress; thus, Freeport would take it seriously to establish a smelter. We will give permit to speed up the construction. and we will evaluate this every six months. We will then decide whether we will freeze it or revoke it," Teguh noted.

Teguh, who is also the chief of the government negotiation team, stated that the US-based company has agreed to construct smelter in five years, and it would be finished by 2022 at the latest.

During the construction process, the government would provide the license for Freeport to export concentrate with export duty.

Meanwhile, the ministrys Director for mineral business development Bambang Susigit remarked that the ministry could recommend revocation of its license to export concentrate if Freeport failed to reach 90 percent of its six-monthly development target.

"It means that 90 percent of the six-month plan must be reached. If not, under the ministerial regulation, the Director General of Mineral and Coal would give a recommendation to revoke its export license," Susigit revealed.

The ministry has notified PT Freeport Indonesia to report the progress in its smelter development on Aug 15 at the latest.

Under the government regulation no. 1/2017 on mineral and coal mining business, Freeport is required to change its Contract of Work status (KK) to a special mining business license (IUPK).

Under the regulation, IUPK holder companies would have to build a smelter in five years.(*)

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