Minister Bahlil: Freeport IUPK Negotiations Are Almost 98 Percent

Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia. (Photo: Doc. ANTARA)

JAKARTA - Investment Minister/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia revealed that the negotiation process for the extension of PT Freeport Indonesia's special mining business license (PTFI) has reached 98 percent.

For your information, PT Freeport Indonesia will get an IUPK for 20 years, namely until 2061 after the end of the contract in 2041.

Furthermore, Bahlil also revealed points that had been agreed upon as a requirement for the extension of the IUPK.

One of them is PTFI's share divestment of 10 percent.

As for the additional 10 percent stake, the government through the holding company of mining SOEs, PT Mineral Industri Indonesia (MIND ID) will control 61 percent of PTFI's shares.

In addition to the addition of shares, Bahlil also said that both parties had approved the construction of a new smelter in Papua. But unfortunately, Bahlil did not explain where the area was intended.

"I have negotiated with Freeport. And almost 98 percent, the points have been agreed. One of them is the additional 10 percent stake, then building a smelter in Papua," he said at the BKPM office, Jakarta, Friday, June 7.

Furthermore, Bahlil also said that both parties had agreed to involve local Papuan entrepreneurs.

"Don't be Freeport businessmen from nail scissors, to hair scissors from all entrepreneurs from Jakarta. We want Papuans to also take productive part in order to continue from the extension of PT Freeport," he said.

Previously, it was reported that the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif spoke bluntly about the government's reason for approving the extension of the PT Freeport Indonesia (PTFI) Special Mining Business License (IUPK) until 2061.

Just so you know, the government is currently revising Government Regulation (PP) No. 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities.

Arifin emphasized that the reason for the government to extend the permit was to maintain the supply of copper ore for the needs of refining or smelter facilities.

"Yes (extended) 2061. Because of this, because he built the smelter, the capacity is large, new and existing. So it does require certainty in the supply of the ore," said Arifin to the media crew when met at the Musrenbangnas event, JCC Jakarta, Monday 7 May.

He further explained that if PTFI only relied on the current supply of ore, there would be a possibility of decreased production to losses for PTFI.

"So indeed with that, he will allocate a budget to explore in his work area. So that we can ensure that later 2061 smelters can be guaranteed that supply," explained Arifin.