MINISTER of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia explained the main reason the government will extend PT Freeport Indonesia’s (PTFI) special mining business permit (IUPK) until 2061. The main aim is to support the ongoing downstream program in Indonesia. Bahlil made this statement in a public lecture held at Lambung Mangkurat University, South Kalimantan, Thursday (2/5).
Freeport is known to be building a copper concentrate refining and processing facility (smelter) in the Gresik Special Economic Zone (KEK), Gresik Regency, East Java. This smelter will be the largest single line smelter in the world with a processing capacity of 1.7 million tons of copper concentrate per year or 480,000 tons of copper metal.
“The PT Freeport smelter in Gresik is a strategic policy related to the copper mining industry. If we build this downstreaming in the region, it can create added value and business opportunities,” said Bahlil in an official statement, Friday (3/5).
In fact, PTFI’s operating contract period ends in 2041. This means that there is an additional contract extension of up to 20 years. The condition for extending PTFI’s IUPK is an increase in shares of 10%, so that the total shares that the Indonesian government will pocket is 61%.
With the addition of these shares, it is hoped that there will be new job opportunities from the electric vehicle ecosystem. As is known, copper is the main component of electric vehicles, including the engine, battery and cables.
“If there is copper, we can build an electric car factory here. So we will build an entire ecosystem in Indonesia. Later, this can create lots of new jobs,” he stressed.
Also read: Integration of investment in the construction of the Freeport Smelter with other mining smelters is appreciated
Bahlil then said that before 2018, Indonesia owned only 9.36% of Freeport’s shares. Then, in September 2018, the government through PT Inalum (Persero) paid US$3.85 billion or almost IDR 60 trillion to Freeport McMoRan Inc. (FCX) to gain 51.23% share ownership. Currently, he said, PT Freeport shares have a dividend valuation of IDR 300 trillion.
“We (the Indonesian government) bought almost US$4 billion and from that income now the 2024 dividend has almost been paid off with that income. This means that Mr Jokowi made the purchasing policy not in vain. Now PT Freeport’s valuation has reached IDR 300 trillion,” he said.
The application process for extending PTFI’s IUPK until 2061 is said to be almost complete and is just waiting for the revision of Government Regulation Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities. (Z-2)
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