Great, Mimika Regency Government Gets Rp300 Billion From Freeport's Net Profits

Head of Regional Revenue Agency (Bapenda) Mimika Dwi Cholifah (Photo: Evarianus Supar/Antara)

JAKARTA - The Mimika Regency Government, Papua this year received a share of Rp300 billion from the net profits obtained by PT Freeport Indonesia during 2020.

Head of the Regional Revenue Agency (Bapenda) Mimika Dwi Cholifah said the profit-sharing received by Mimika Regency was as a result of the change in the Contract of Work regime to the Special Mining Business Permit (IUPK) of PT Freeport Indonesia.

Through the IUPK signed in 2018, the Mimika Regency Government is one of the shareholders of PT Freeport Indonesia along with the Papua Provincial Government (10 percent) and the Indonesian Government.

"In the near future, Mimika Regency will receive a payment of Rp300 billion from the net profit share of PT Freeport Indonesia. This is regulated in Law Number 3 of 2020 concerning Mineral and Coal Mining which is an amendment to Law Number 4 of 2009," explained Dwi as quoted by Antara, Tuesday, June 15.

In Law Number 3 of 2020, it is regulated that the IUPK holder in this case PT Freeport Indonesia is obliged to deposit 4 percent of the net profit to the Central Government and 6 percent to the Papua Regional Government.

The 6 percent of the net profit paid to the Papua Regional Government is further divided, namely 2.5 percent for Mimika Regency as a producing area, 2 percent for districts/cities in Papua Province, and 1.5 percent for Papua Provincial Government.

"The Rp300 billion fund that will be received by Mimika Regency is part of the 2.5 percent distribution as producing regions," he said.

Dwi said that since the Contract of Work regime changed to IUPK PT Freeport Indonesia, this is the first time the Mimika Regency Government will receive a net profit payment from the company's operations in 2020.

Meanwhile, in 2019 PT Freeport Indonesia and the Ministry of Energy and Mineral Resources reported that the mining company had not received a net profit so that it could not pay dividends to shareholders.

According to Dwi, the share received by the Mimika Regency Government from net profits will be even greater if the profits obtained by PT Freeport Indonesia are greater.