Bahlil Opens Up About Freeport Shares Plus 12 Percent Until Solar Imports Will Drop

Minister of Energy and Mineral Resources Bahlil Lahadalia (Photo: Teddy Kurniawan/VOI)

Jakarta - The government has confirmed that it will increase its share ownership in PT Freeport Indonesia by 12 percent. The addition will be realized after Freeport's contract ends in 2041. However, the exploration and production process must still start now.

"If it is not extended and exploration is carried out, we can lose time. Production is now the result of exploration in 2003-2004. The peak is 2035, then it goes down," said ESDM Minister Bahlil Lahadalia to reporters at the Presidential Palace Complex, Friday, October 24.

He said President Prabowo had given directions regarding the addition of the shares. In addition, Freeport is still subject to a 25 percent corporate income tax rate, higher than the national provisions, which fell below 22 percent.

"This is to optimize state revenues. They will also build health and education facilities in Papua, and involve local entrepreneurs," he added.

Regarding the landslide incident at the Freeport underground mine that killed seven workers, Bahlil stated that the evacuation process had been completed. Production is also starting, but it must be audited in total first.

Meanwhile, in the downstream sector, diesel imports will certainly fall. This follows the inauguration of the RDMP project in Kalimantan which is able to increase production capacity to 130 thousand barrels per day.

"I am optimistic that diesel imports will be smaller," he said.

Regarding the Tuban Refinery project, the government continues even though there has been no final decision from Rosneft. "Plan A and B are still being discussed. The government and Pertamina are still executing it. This is a strategic need," said Bahlil.

On the other hand, the government provides relaxation of concentrat exports for AMMAN Mineral due to macheral conditions. A similar relaxation was given to Freeport. The duration of the export is temporarily pegged for six months, but it can shift until 2026, adjusting the progress of the smelter construction.

For the development of bioethenol energy, the government targets the production of 1.4 million kiloliters per year, well below the national gasoline consumption of 40 million KL. We don't want the mandatory 10 percent but the raw materials are still imported. Ethanol must be domestically produced," he explained.

Incentives such as tax holidays and ease of licensing are prepared so that the bioethenol industry grows fast. We will invite the collaboration of cassava, corn and sugar cane industry players. We are gradual, the important thing is to be realistic," he concluded.