"Freeport will not use arbitration since there has to be a solution adopted by both parties," Industry Minister MS Hidayat said.
Jakarta (ANTARA News) - Industry Minister MS Hidayat stated that the mining company PT Freeport Indonesia will not appeal for arbitration on its objection regarding the Finance Ministers regulation (PMK) on export tax.

"Freeport will not use arbitration since there has to be a solution adopted by both parties," the minister stated, here on Thursday.

Hidayat admitted that though Freeports objected the Finance Ministers regulation issuance, its unlikely that the mining company will resolve the dissension through legal channels.

The government has even requested PT Freeport to abide by the law on the mineral and coal issue by building its smelter within three years, Hidayat remarked.

"It is better we find a solution that can be adopted by both parties, instead of committing a legal polemic. So, the government remains committed on the three-year period to build a smelter," Hidayat explained.

Meanwhile, Finance Minister Chatib Basri stated last Tuesday that PT Freeport previously indicated that it would like to have a higher rate of export tax revoked on the basis that it plans to build a smelter.

The recent imposition of an export tax on mineral products that will increase progressively from 25 to 60 per cent, from 2014 to 2016, is aimed at forcing mineral- and coal-mining companies to build smelters in the country, he explained.

"PT Freeport has not informed me that it plans to build a smelter," the minister asserted. Chatib was speaking on Tuesday, after he launched the "Corporate Roadmap & Corporate Governance Manual", issued by the Financial Service Authority in Jakarta.

"We could not talk about whether the export tax would be increased or decreased because the essence of the matter is whether a smelter is available or not," the minister pointed out. "Mere words are nothing; what is needed is proof. Companies must invest," he added.

Chatib explained that the export tax would only be revoked for companies that have built smelters.

On Wednesday (Jan. 29), Richard C Adkerson, Vice Chairman of Freeport McMoran Copper and Gold, stated that his company will need to invest more than US$2 billion to build a smelter in Indonesia.

Many things still need to be discussed, Adkerson added, and PT Freeport will work according to the regulations of the country.(*)

Editor: Heru Purwanto
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