Although the Indonesian government had successfully secured 51.23 percent shares of PT Freeport Indonesia, one of the largest mining company in the country, welfare gap continues to exists in Papua. Moreover the local government is yet to receive any benefits of the divestment since 2018.
Currently, 51.23 percent of Freeport Indonesia shares are held by PT Inalum (26.23 percent) and PT Indonesia Papua Metal dan Mineral (IPMM) (25 percent). IPMM is a joint venture company in which 10 percent of its shares is owned by the local Papuan government. From the total 10 percent of shares, the Papua provincial government receives three percent while the Mimika Regency Government receives seven percent.
“Papua have indeed received 10 percent of Freeport shares, that will be distributed to the provincial government as many as three percent and the regency government seven percent. But until now, the regency government still has not received the promised shares,” Mimika Regency Eltinus Omaleng said.
Omaleng added that the Mimika Regency should be the one receiving profits and much of the benefits of Freeport activities because the region suffers direct effect of mining activities including tailing and damaged environment.
“The people should be prosper because of mining, because everywhere in the whole world, people living around mining areas must prosper. The mines should be useful to reduce poverty, reduce illiteracy, and provide health facilities for people of Mimika,” Omaleng added.
Not the new kid on the block
Freeport have been operating in Papua since 1967, and has been the most prominent gold mining company in Indonesia aside from PT Aneka Tambang.
From 1992 to 2021, Freeport has been contributing US$23.1 billion to the state revenue through taxes, royalties, dividends and other payments. On the other hand, the company’s contribution to the local residents is said to reach US$2 billion for the same period.
Freeport President Director Tony Wenas said that the company’s contribution will continue and is calculated to reach US$100 billion every year until the company’s mining permit expires in 2041.
Despite all of the major numbers, the percentage of underprivileged people in Papua and Mimika remains quite high at 20 to 40 percent, and 14.17 percent, respectively.
In addition, the gini ratio in both region also quite high with Papua recording a gini ratio of 0.4 and Mimika recording a gini ratio of 0.35.
