Minister Of Energy And Mineral Resources Arifin Tasrif: Government Allows Freeport Indonesia To Export Concentrates After June 2023

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif. (Photo: Doc. Antara)

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the government allowed PT Freeport Indonesia to export copper concentrates after June 2023.

"(The decision) is permissible (export of copper concentrate), until the progress of his commitment to completing (smelters) and should not be more than mid-year next year," said Arifin Tasrief in the presidential palace of Jakarta, quoted from Antara, Friday, April 28.

Based on the mandate of Law No. 3 of 2020 concerning Mineral and Coal Mining (Minerba), the government has begun to stop exports of raw mineral commodities including copper concentrate after June 10, 2023, but Freeport is allowed to export until the smelter built begins market operations in 2024.

Previously, Freeport-Mcmuan Inc. CEO and President Commissioner of PT Freeport Indonesia Richard C Adkerson said that his party was negotiating to obtain approval for the continuation of the export of copper concentrate after June 10, 2023, until the new copper processing and refining plant (smelter) in Manyar, the Java Integrated Industrial and Port Estate (JIIPE) Special Economic Zone (JIIPE), Gresik, East Java, fully operational in 2024.

"We consider what has been built from the project commitment. We consider the obstacles faced by the construction, right during COVID-19, the contractor is Japan. Japan alone has been in lockdown for several years. Indeed, the work on 'engineering' is a bit difficult to progress, if 'engineering' there is no progress, the purchase of 'procurement' material also has no progress," explained Arifin.

As of March 2023, the smelter construction process has reached around 60 percent. It is targeted that this smelter can operate in May 2024.

"Not violating the Minerba Law, there is a 'force majeur' problem, right? The impact is that pandemic, right? The virus is dangerous," said Arifin.

The government, according to Arifin, is considering the obstacles to the construction of smelters in Manyar, which are hampered by the pandemic.

"So the material for our consideration is because if it is stopped at all, then Mind ID (owns shares) is 51 percent, Indonesia has 51 percent of its shares, so the impact will be more, we are looking for a way out," Arifin added.

Mining Industry Indonesia (MIND ID) is a BUMN Holding Indonesian mining industry consisting of PT ANTAM Tbk, PT Bukit Asam Tbk, PT Freeport Indonesia, PT Inalum (Persero) and PT Timah Tbk.

"He (Freeport Indonesia) may export concentrate if he builds a smelter and this smelter progress is 60 percent this month, but indeed, the rules should have been completed in 2023, but earlier there were issues of difficulties faced and there were also 'partnerships' between Indonesia and Freeport," said Arifin.

In Freeport's Special Mining Business Permit (IUPK), exports are allowed to continue during 2023, depending on the consideration of the force majeure situation.

Previously on April 12, 2023, Richard C Adkerson, President Director of PT Freeport Indonesia Tony Wenas and other Freeport Indonesia officials met President Joko Widodo at the Merdeka Palace in Jakarta. On the same day President Jokowi also received five members of the United States congress from the Democratic Party, Senator Jeff Merkley, Senator Chris Van Hollen, Representative Lloyd Doggett, Representative Praila Jayapal, Representative Ilhan Omar.