Aspebindo Asks Government To Review Extension Of PT Freeport Indonesia's Export Permit

Illustration (Photo: Doc. Antara)

JAKARTA - The Association of Indonesian Energy, Mineral, and Coal Suppliers (Aspebindo) has asked the government to reconsider the policy of extending the export license for PT Freeport Indonesia (PTFI) copper until 2024.

Deputy Chairperson of Aspebindo Fathul Nugroho said that this step was deemed not in accordance with the mandate of the Minerba Law which requires the cessation of raw mineral exports in June 2023.

He assessed that the extension of this permit could affect the government's commitment to encouraging downstream mining industry in Indonesia.

"The government should focus more on developing the domestic mineral processing industry to increase the added value of the economy and reduce dependence on raw mineral exports," he said, quoted on Thursday, May 11.

In his statement, Fathul also expressed concern over injustice in the application of taxes and export costs.

"If the government wants to provide relaxation to PTFI, it should be subject to export tax or higher export costs than other companies. This will create fair conditions for companies that have invested in mineral processing in Indonesia," he said.

Fathul added, one of the main reasons behind the policy to prohibit raw mineral exports is encouraging companies such as PTFI to build smelter facilities to process minerals domestically.

However, the copper smelter built by Freeport has not yet operated, so the extension of this export permit can provide an inaccurate signal to the company and reduce incentives to operate the smelter.

Fathul also highlighted the policy of exporting raw copper, because with this regulation it has the potential to be carried away by accompanying minerals such as rare earth minerals that have the potential to have economic value.

"This extension of the export license will result in the loss of opportunities for Indonesia to benefit more from the following minerals, while reducing incentives to develop a more environmentally friendly and higher value downstream industry," Fathul concluded.

Therefore, he said, the government needs to be more assertive in implementing regulations on increasing the added value of natural resources, including the enforcement of the ban on raw mineral exports.

"Aspebindo invites the government and various related parties to review the policy of extending PT Freeport Indonesia's copper export license to create better policies," concluded Fathul.