Support Freeport Contract Extension, Erick Thohir: Not In A Hurry

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir fully supports the extension of PT Freeport Indonesia (PTFI) contract until 2061.

Freeport's contract itself will only expire in 2041.

Erick said that the extension of PTFI's contract could not be said to be in a hurry.

The reason is, the extension of the mining sector investment contract must be carried out in advance. This means that investment cannot be made when the contract has expired.

"It's not a rush. It's true that investment for the next two years, if the mining business must invest at the beginning, there's no contract for new investments," Erick said at a press conference at the BUMN Ministry Office, Tuesday, December 19.

Erick said, there are two options that Freeport can take. First, develop existing potential. Second, stop in 2041 when the contract expires.

If Freeport wants to develop its potential after 2041, then it must extend its current investment.

"Indeed, the potential is still there or a shutdown in 2041, that's the choice. If you want to dig into potential or shutdown down, but if you want to explore the potential of beyond 2041, he must invest now. That's why freeport talks with ministries, not me, I'm a shareholder," he said.

Erick admitted that he supports Freeport to extend the contract because this will increase the share portion of the Indonesian side.

"Moreover, we have 51 percent, yes we support, especially since we have increased to 61 percent, thank God. Dividends are even more large, that's what we want to encourage also in Vale," he said.

With this contract extension, said Erick, Freeport will also build a new smelter in Fakfak, West Papua.

"The investment will be in addition to the smelter in Gresik from 1.3 million (tons) plus 1.7 (million tons), later in Fakfak. That's all money," he explained.