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Fathan Qorib/Kartini L Makmur/Robert Sidauruk
Despite some continued hesitation by the Government in deciding whether or not to extend PT Freeport’s contract of work, the Government is currently drafting a side letter that will be incorporated into the current contract with PT Freeport as a tradeoff for the company’s commitment to establish a smelter in Indonesia.
Chairul Tanjung, the Coordinating Minister for Economic Affairs, explained that the Government has secured a commitment from PT Freeport to establish a smelter under which a USD 115 million guarantee is to be put forward in the form of a performance bond for development of the project. In return, PT Freeport has asked that the Government renegotiate the current contract of work through a side letter or side agreement.
Although he would not disclose details, Mr. Tanjung indicated that the side letter covers divestment matters and other long term issues. Nevertheless, Mr. Tanjung asserted that the Government will not sign the letter if PT Freeport does not comply with its obligations under Law No. 4 of 2009 on Coal and Mineral Mining, and Government Regulation No. 9 of 2012 on non-tax state revenue within the Ministry of Energy and Mineral Resources.
“As long they have not agreed to the applicable obligations in accordance with the prevailing laws and regulations, the Government will not sign the side letter,” said Mr. Tanjung.
Previously, Jero Wacik, Minister of Energy and Mineral Resources also asserted that the Government will not compromise on the mineral export ban policy with PT Freeport, including mineral concentrate threshold levels.
“Minerals in the form of raw materials or ore remains prohibited to be exported. The only way to export is that they wait until their smelter is ready,” said Mr. Wacik.
As follow up to PT Freeport’s commitment to establish a smelter, Mr. Wacik said that the Government will appoint an independent third party to supervise the smelter construction progress. This third party will provide periodic reports to the Government so the Government can determine whether PT Freeport is performing its obligations otherwise risk surrendering the performance bond guarantee.
“We will appoint a third party to report on the progress of the smelter construction. The performance bond guarantee will be taken by the Government if the company breaches the contract or fails to build the smelter,” concluded Mr. Wacik.
(ds/kc)
Despite some continued hesitation by the Government in deciding whether or not to extend PT Freeport’s contract of work, the Government is currently drafting a side letter that will be incorporated into the current contract with PT Freeport as a tradeoff for the company’s commitment to establish a smelter in Indonesia.
Chairul Tanjung, the Coordinating Minister for Economic Affairs, explained that the Government has secured a commitment from PT Freeport to establish a smelter under which a USD 115 million guarantee is to be put forward in the form of a performance bond for development of the project. In return, PT Freeport has asked that the Government renegotiate the current contract of work through a side letter or side agreement.
Although he would not disclose details, Mr. Tanjung indicated that the side letter covers divestment matters and other long term issues. Nevertheless, Mr. Tanjung asserted that the Government will not sign the letter if PT Freeport does not comply with its obligations under Law No. 4 of 2009 on Coal and Mineral Mining, and Government Regulation No. 9 of 2012 on non-tax state revenue within the Ministry of Energy and Mineral Resources.
“As long they have not agreed to the applicable obligations in accordance with the prevailing laws and regulations, the Government will not sign the side letter,” said Mr. Tanjung.
Previously, Jero Wacik, Minister of Energy and Mineral Resources also asserted that the Government will not compromise on the mineral export ban policy with PT Freeport, including mineral concentrate threshold levels.
“Minerals in the form of raw materials or ore remains prohibited to be exported. The only way to export is that they wait until their smelter is ready,” said Mr. Wacik.
As follow up to PT Freeport’s commitment to establish a smelter, Mr. Wacik said that the Government will appoint an independent third party to supervise the smelter construction progress. This third party will provide periodic reports to the Government so the Government can determine whether PT Freeport is performing its obligations otherwise risk surrendering the performance bond guarantee.
“We will appoint a third party to report on the progress of the smelter construction. The performance bond guarantee will be taken by the Government if the company breaches the contract or fails to build the smelter,” concluded Mr. Wacik.
(ds/kc)
Fathan Qorib/Kartini L Makmur/Robert Sidauruk
Despite some continued hesitation by the Government in deciding whether or not to extend PT Freeport’s contract of work, the Government is currently drafting a side letter that will be incorporated into the current contract with PT Freeport as a tradeoff for the company’s commitment to establish a smelter in Indonesia.
Chairul Tanjung, the Coordinating Minister for Economic Affairs, explained that the Government has secured a commitment from PT Freeport to establish a smelter under which a USD 115 million guarantee is to be put forward in the form of a performance bond for development of the project. In return, PT Freeport has asked that the Government renegotiate the current contract of work through a side letter or side agreement.
Although he would not disclose details, Mr. Tanjung indicated that the side letter covers divestment matters and other long term issues. Nevertheless, Mr. Tanjung asserted that the Government will not sign the letter if PT Freeport does not comply with its obligations under Law No. 4 of 2009 on Coal and Mineral Mining, and Government Regulation No. 9 of 2012 on non-tax state revenue within the Ministry of Energy and Mineral Resources.
“As long they have not agreed to the applicable obligations in accordance with the prevailing laws and regulations, the Government will not sign the side letter,” said Mr. Tanjung.
Previously, Jero Wacik, Minister of Energy and Mineral Resources also asserted that the Government will not compromise on the mineral export ban policy with PT Freeport, including mineral concentrate threshold levels.
“Minerals in the form of raw materials or ore remains prohibited to be exported. The only way to export is that they wait until their smelter is ready,” said Mr. Wacik.
As follow up to PT Freeport’s commitment to establish a smelter, Mr. Wacik said that the Government will appoint an independent third party to supervise the smelter construction progress. This third party will provide periodic reports to the Government so the Government can determine whether PT Freeport is performing its obligations otherwise risk surrendering the performance bond guarantee.
“We will appoint a third party to report on the progress of the smelter construction. The performance bond guarantee will be taken by the Government if the company breaches the contract or fails to build the smelter,” concluded Mr. Wacik.
(ds/kc)
Despite some continued hesitation by the Government in deciding whether or not to extend PT Freeport’s contract of work, the Government is currently drafting a side letter that will be incorporated into the current contract with PT Freeport as a tradeoff for the company’s commitment to establish a smelter in Indonesia.
Chairul Tanjung, the Coordinating Minister for Economic Affairs, explained that the Government has secured a commitment from PT Freeport to establish a smelter under which a USD 115 million guarantee is to be put forward in the form of a performance bond for development of the project. In return, PT Freeport has asked that the Government renegotiate the current contract of work through a side letter or side agreement.
Although he would not disclose details, Mr. Tanjung indicated that the side letter covers divestment matters and other long term issues. Nevertheless, Mr. Tanjung asserted that the Government will not sign the letter if PT Freeport does not comply with its obligations under Law No. 4 of 2009 on Coal and Mineral Mining, and Government Regulation No. 9 of 2012 on non-tax state revenue within the Ministry of Energy and Mineral Resources.
“As long they have not agreed to the applicable obligations in accordance with the prevailing laws and regulations, the Government will not sign the side letter,” said Mr. Tanjung.
Previously, Jero Wacik, Minister of Energy and Mineral Resources also asserted that the Government will not compromise on the mineral export ban policy with PT Freeport, including mineral concentrate threshold levels.
“Minerals in the form of raw materials or ore remains prohibited to be exported. The only way to export is that they wait until their smelter is ready,” said Mr. Wacik.
As follow up to PT Freeport’s commitment to establish a smelter, Mr. Wacik said that the Government will appoint an independent third party to supervise the smelter construction progress. This third party will provide periodic reports to the Government so the Government can determine whether PT Freeport is performing its obligations otherwise risk surrendering the performance bond guarantee.
“We will appoint a third party to report on the progress of the smelter construction. The performance bond guarantee will be taken by the Government if the company breaches the contract or fails to build the smelter,” concluded Mr. Wacik.
(ds/kc)