Government praised for successfully dealing with PT Freeport

Jakarta (ANTARA News) - A parliamentary leader has praised the government of President Joko Widodo for having successfully secured a deal to own 51 percent of shares of US mining giant PT Freeport Indonesia.

"We praised Jokowi for his policy to successfully secure 51 percent of Freeport shares, while the governments tax receipt would not decline, and to impose a special mining business permit (IUPK) instead working contract on PT Freeport," the deputy chairman of House of Representatives Commission VII on energy and mineral resources, Satya Widya Yudha, said in a press release received here on Saturday.

The politician from the countrys second biggest political party Golkar stated that Freeport has been ready to invest US$20 billion in additional business, including building a smelter.

In view of that, he hoped that all national elements, especially the people of Papua where the mining operation is located, would fight together for an eventual 100 percent shareholding.

Commission VII member Kurtubi shared his view that the government deserved praise for its successful negotiation.

The politician from Nasdem party especially underlined the governments success in persuading Freeport to leave the working contract used so far and switch to IUPK for its operation.

A member of the Regional Representatives Council (DPD) from Papua, Charles Simare Mare, thanked Jokowi for his success in securing 51 percent of PT Freeport Indonesia shares and hoped that the central government would involve more Papuans in the business.

PT Freeport Indonesia has announced its long-term plan after reaching a deal with the Indonesian government through negotiations so far.

"We would like to gladly announce that an agreement on framework to support the operation and investment has now been implemented in Papua. The achievement for an understanding on the structure of common agreement is significant and positive for all stakeholders," PT Freeport Indonesias president and chief executive officer Richard C Adkerson said in a written statement received by Antara on Wednesday (Aug 30).

According to it, PT Freeport Indonesia would change its working contract into IUPK that will give long-term operation right for the company until 2041.

The Indonesian government would give guarantee on fiscal and legal certainty during the IUPK tenure, while PT FI would be committed to build a new smelter in Indonesia within a five-year period.

Freeport-McMoran has agreed to divest its shares in PT FI based on a reasonable market price to make Indonesias holding of PT FI shares reach 51 percent.(*)