Friday, April 19, 2024

Government hastens regulation revision to secure 61 percent Freeport shares

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Audina Nur

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Editor

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Minister of Investment/Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia, has announced that the government is expediting the revision of regulations to accommodate the extension of PT Freeport Indonesia’s mining permits.

The targeted regulation is Government Regulation (PP) No. 96/2021 on the Implementation of Mineral and Coal Mining Business Activities.

“We’ve held limited meetings regarding PP No. 96, and we’re accelerating the decision-making process. So, with PP No. 96, we’re making adjustments and speeding up to provide sustainable investment certainty,” Bahlil told a media conference on Monday, March 18, 2024.

Bahlil emphasized that the provisions in the revised PP No. 96/2021 will not be specific to just one company. Instead, the government will apply the principle of equal treatment.

With the extension of Freeport’s contract through this regulatory revision, Indonesia will increase its share ownership by 10 percent in Freeport to 61 percent. Currently, Indonesia, through its mining SOE holding MIND ID, holds 51 percent of Freeport’s shares.

“Once PP No. 96 is completed, God willing, if it happens, then the potential addition of Freeport shares for the Republic of Indonesia, which currently stands at 51 percent, will increase to 61 percent. This means Freeport will no longer be owned by other parties, it’s ours because our shares will be 61 percent,” he said.

The government plans to revise the provisions regarding the timeframe for submitting requests for contract extensions for mining companies as stipulated in PP No. 96/2021. Based on Article 109 of PP No. 96/2021, requests for extending the period of production operation activities for metal or coal mining must be submitted to the minister no earlier than 5 years and no later than 1 year before the end of the production operation period.

Referring to this rule, Freeport’s mining business license (IUPK), which expires in 2041, should only be processed at the earliest in 2036.

Audina Nur

Journalist

 

Editor

 

Interview

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