Freeport?s Mining Contract Renegotiation Continues, Despite New Licenses

Kartini L Makmur, Robert Sidauruk

Following the cave-in tragedy at the Big Gossan underground mining site, as of 21st June PT Freeport Indonesia (Freeport) has been permitted to fully operate, with the Government issuing an open pit production license as well as an underground production license.

This was confirmed by Susilo Siswoutomo, Deputy Minister of Energy and Mineral Resource (ESDM), indicating that these licenses have been granted to Freeport. He further informed that the licenses were granted after evaluating the findings of the Independent Investigation Team formed by the Minister of ESDM, the Regional Government as well as local communities

Susilo added that there remain several recommendations made by the Independent Investigation Team to which Freeport must comply, such as conducting training activities that do not involve underground mining outside the tunnel. Susilo emphasized that the granting of the licenses to Freeport has nothing to do with contract renegotiations.

“Contract re-negotiation covers all related aspects, further discussions will be held to put forward the relevant matters,” said Susilo in Jakarta, Monday.

Marwan Batubara, Executive Director at Indonesia Resources Studies (IRESS) criticized the Government’s granting of the new licenses to Freeport. Marwan asserted that any new licenses issued to Freeport should be part of the mining contract renegotiation process.

With these circumstances, Marwan noted that by securing a new underground production license, Freeport may insist on refusing any contract renegotiation. He also warned that the Government should remain cautious and keep a focus on contract renegotiation discussions despite the issuance of the new licenses.

“The Government must not willfully blind themselves by thinking that the issuance of the new licenses will not revive the obligation to renegotiate the contract,” Marwan emphasized.

(hot/kc)

Kartini L Makmur, Robert Sidauruk

Following the cave-in tragedy at the Big Gossan underground mining site, as of 21st June PT Freeport Indonesia (Freeport) has been permitted to fully operate, with the Government issuing an open pit production license as well as an underground production license.

This was confirmed by Susilo Siswoutomo, Deputy Minister of Energy and Mineral Resource (ESDM), indicating that these licenses have been granted to Freeport. He further informed that the licenses were granted after evaluating the findings of the Independent Investigation Team formed by the Minister of ESDM, the Regional Government as well as local communities

Susilo added that there remain several recommendations made by the Independent Investigation Team to which Freeport must comply, such as conducting training activities that do not involve underground mining outside the tunnel. Susilo emphasized that the granting of the licenses to Freeport has nothing to do with contract renegotiations.

“Contract re-negotiation covers all related aspects, further discussions will be held to put forward the relevant matters,” said Susilo in Jakarta, Monday.

Marwan Batubara, Executive Director at Indonesia Resources Studies (IRESS) criticized the Government’s granting of the new licenses to Freeport. Marwan asserted that any new licenses issued to Freeport should be part of the mining contract renegotiation process.

With these circumstances, Marwan noted that by securing a new underground production license, Freeport may insist on refusing any contract renegotiation. He also warned that the Government should remain cautious and keep a focus on contract renegotiation discussions despite the issuance of the new licenses.

“The Government must not willfully blind themselves by thinking that the issuance of the new licenses will not revive the obligation to renegotiate the contract,” Marwan emphasized.

(hot/kc)

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