The Ministry of Energy and Mineral Resources (ESDM) has revealed that the extension of the special mining business permit (IUPK) for PT Freeport Indonesia (PTFI) is still in the negotiation phase and has not yet been finalized.
Minister of ESDM, Bahlil Lahadalia, said on Monday, August 27, 2024 that negotiations concerning the permit extension are ongoing, particularly with the Ministry of State-Owned Enterprises (SOEs).
“This will be discussed with pak Tony [Wenas]. We are still in negotiations with the SOE ministry,” Bahlil said.
Tony Wenas, the President Director of PTFI, has confirmed that discussions with the government are continuing on various aspects.
“Everything is still being discussed. Hopefully, it can be resolved sooner because the sooner, the better,” Tony said on August 22, 2024.
According to Bahlil, one of the reasons for the delay in the IUPK extension process is that Freeport has not yet met several requirements needed for the permit.
In fact, negotiations between Freeport and the Ministry of SOEs have not yet reached a final agreement. Additionally, the construction of the copper smelting and refining facility (smelter) in Fakfak, West Papua, is a significant point of discussion in the talks about extending their operational permit beyond 2041.
Previously, Bahlil, when he was still serving as the Minister of Investment/Head of BKPM, assured that the IUPK extension for PTFI would be completed this year before the new government begins.
“We will handle the extension before the current administration ends,” Bahlil said on July 11, 2024.
Currently, PTFI holds an IUPK that is valid until 2041. In the contract extension after 2041, Indonesia is expected to gain an additional 10 percent shareholding, bringing the total ownership of Indonesia in Freeport to 61 percent.
This was reiterated by Bahlil during the inauguration of PTFI’s Manyar copper smelter operation in Gresik recently.
“It would be unfair if we didn’t grant the permit extension, especially since they have built a smelter in Gresik, and we will get an additional 10 percent stake. It has also been agreed that Freeport will build a smelter in Papua,” Bahlil said on June 27, 2024.
With this shareholding, Bahlil stressed that PTFI is now essentially an Indonesian entity, no longer owned by Freeport McMoran.
“It is owned by the state, so why should we complicate the extension process?” Bahlil concluded.
