PT Freeport Indonesia is still unable to resume copper concentrate exports, despite the government granting export permit relaxation through Ministerial Regulation No. 7/2023 regarding the Continuation of the Development of Metal Mineral Refining Facilities in the Country.

Katri Krisnati, Freeport's spokesperson, stated that the delayed permit has had a negative impact on the company's operations, particularly on the condition of the storage warehouse for the concentrate, which is already full. In fact, some of the concentrate had to be placed outside the warehouse.

"Our export permit expired on June 10, 2023, and since then, Freeport has ceased its export activities. Until today, we are still awaiting the issuance of the export permit," said Katri in a text message on Tuesday (July 4).

Warehouse overloaded

Katri further explained that the suspension of exports for the past 25 days has resulted in the copper concentrate storage facility or warehouse in Amampare, Mimika, Papua to overload.

PTFI has three warehouses with a storage capacity of 40,000 tons each, with 40% of the concentrate being shipped to PT Smelting's smelting plant in Gresik. "Without an export permit, it is certain that PTFI's activities will be suspended, significantly impacting the overall operational activities and sales of mining products," said Katri.

The extension of the export permit has recently become an urgent issue within Freeport. The company is currently engaged in dialogue with the relevant ministry to expedite the issuance of the export permit. "This is our top priority at the moment," said Katri.

Ministry responds

Previously, the Acting Director General of Minerals and Coal (Minerba), Muhammad Wafid, stated that the Ministry of Energy and Mineral Resources had provided recommendations for the extension of export permits to Freeport and PT Amman Mineral Nusa Tenggara.

However, the recommendations from the Ministry of Energy and Mineral Resources, as stated in Ministerial Regulation No. 7/2023, are not an instant ticket to facilitate the export relaxation for Freeport and Amman.

According to Wafid, these two companies also need to obtain further permits from the Ministry of Trade, the Ministry of Industry, and the Customs and Excise under the Ministry of Finance.

Consequently, Freeport and Amman remains unable to export copper concentrate abroad despite obtaining recommendations for the extension of export permits from the Ministry of Energy and Mineral Resources until May 2024.

"Technically, Freeport and Amman should not be allowed to export yet. Until all the regulations are synchronized, the implementation cannot proceed," said Wafid at the Ministry of Energy and Mineral Resources office on Monday (July 3).

Other matters related

It is also important to note that at the moment, Freeport is being pushed by the Indonesian government to complete its smelter construction.

Constructing a smelter is one of the requirements for PTFI to be able to extend its the Special Mining Business Permit (IUPK).

In addition to constructing a smelter, the government also urged Freeport to divest another 10% of its shares to a state-owned company through the state-owned mining holding, MIND ID.

By extending PTFI's IUPK until after 2041, the government will receive an additional 10% shares in the company. Currently, MIND ID owns 51%, of PTFI's shares, which will increase to 61% if another 10% of the share can be transferred successfully.