Will Control 61 Percent of Freeport Shares, Here are a Number of Advantages for Indonesia

Freeport Mine Illustration (Photo: Antara)

JAKARTA - Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia said that the government is accelerating the revision of Government Regulation (PP) Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities.

Bahlil revealed that after the PP revision, Indonesia would increase its share ownership in PT Freeport Indonesia (PTFI) to 61 percent, from the previous 51 percent.

With Indonesia's increasing shareholding in Freeport, what are the benefits for Indonesia?

Chairman of the Indonesian Mining Experts Association (Perhapi) Rizal Kasli revealed that if PTFI releases 10 percent of its shares, it will automatically be controlled by the state-owned mining holding, MIND ID.

"The advantage is that in addition to receiving dividends from PTFI's operational profit of 65 percent every year, PTFI management, both directors and commissioners, will be more dominant than MIND ID or those appointed by the government," said Rizal when contacted by VOI, Wednesday, March 20.

Rizal said, MIND ID will control the large reserves owned by PTFI and determine PTFI's future considering that PTFI still has other large reserves which will not be mined until 2041.

Apart from that, according to him, PTFI's development prospects are still very possible by carrying out further exploration.

"So the discovery of new resources and reserves will increase the inventory of MIN ID resources and reserves," concluded Rizal.

For information, if Government Regulation Number 96 of 2021 Concerning the Implementation of Mineral and Coal Mining Business Activities has not been revised, PTFI cannot be granted a Special Mining Business Permit (IUPK) sooner. Because the requirements for mining extensions based on Article 109 Paragraph (4) can only be submitted to the Minister no sooner than 5 years or no later than 1 year before the end of the Production Operation activity period.

On the other hand, PTFI's new IUPK will expire in 2041 so Freeport can only apply for a permit extension in 2036 or 2040 at the latest.