Freeport not worried about future despite instability<\/p>\n
JAKARTA (JP): Copper and gold producer PT Freeport Indonesia,
\na subsidiary of New Orleans-based Freeport McMoRan Copper and
\nGold, said yesterday it was not worried about the future of its
\noperations in the country despite recent political changes.<\/p>\n
Company president Adrianto Machribie said the firm's success
\nwas not due to ties to former president Soeharto, and thus his
\nMay resignation would not affect Freeport's position.<\/p>\n
\"We are operating on our contract of work which is based on
\nthe existing rules and regulations. We are not bending the rules
\nand we are not trying to exploit them,\" Adrianto told a packed
\nmedia conference.<\/p>\n
He said the company was confident the government would honor
\nexisting contracts of works.<\/p>\n
Freeport, one of the country's largest taxpayers for years,
\nhas long been dogged by allegations of collusion due its alleged
\nclose connections to Soeharto's administration.<\/p>\n
The company, which has been active in Irian Jaya since the
\n1960s, operates the world's largest copper and gold deposit mine
\nin mineral-rich Irian Jaya. It has proven and probable reserves
\nof 2.17 billion tons of copper, gold and silver ore in and around
\nits Grasberg contract area.<\/p>\n
Freeport is 81.28 percent owned by McMoRan, 9.36 percent by
\nthe Indonesian government and another 9.36 percent by PT
\nIndocopper Investama Corporation.<\/p>\n
Indocopper is 49 percent owned by McMoRan, 50.48 percent by PT
\nNusamba Minerals Industri and 0.52 percent by the public.<\/p>\n
Nusamba Minerals is owned by PT Nusantara Ampera Bhakti
\n(Nusamba), controlled by Soeharto-led foundations and Soeharto's
\nlongtime crony Mohamad \"Bob\" Hasan.<\/p>\n
Nusamba bought its stake in Indocopper from the Bakrie
\nBrothers group in 1996 with a bank loan guaranteed by Freeport.<\/p>\n
The deal further fueled speculation about Freeport-Soeharto
\nconnections. Company spokesperson Yuli Ismartono argued
\nyesterday: \"It is a business deal that is commonly practiced
\naround the world under which the loan is repaid out of the
\ndividend stream.\"<\/p>\n
Adrianto acknowledged that Freeport enjoyed good connections
\nwith Soeharto's administration but claimed the company never
\ncommitted unsavory business practices such as collusion and
\nbribery to ensure smooth running of its operations.<\/p>\n
He said Freeport, through its U.S. parent company, was obliged
\nto abide by transparency guarantees such as the Foreign Practices
\nAct and regulations of the New York Stock Exchange.<\/p>\n
Freeport has also been criticized for years by international
\nand Indonesian groups over allegations of mistreatment of
\nindigenous peoples around its work site and widespread damage to
\nthe environment.<\/p>\n
Several tribes and their members have attempted to file
\nlawsuits in U.S. courts on charges including \"ecoterrorism\" and
\n\"cultural genocide\".<\/p>\n
Adrianto also said that Freeport's operations in Irian Jaya
\nwere unaffected by recent political unrest in the province.<\/p>\n
A small group of separatists held demonstrations in Irian Jaya
\ndemanding the province's independence, beating one police officer
\nto death last week. Police opened fire to break up a crowd that
\nhad raised a rebel flag on the island, leaving several students
\ninjured.<\/p>\n
\"Certainly we are concerned about it, but we're still
\noperating normally,\" Adrianto said.<\/p>\n
Freeport executive vice president Stephen M. Jones said
\nFreeport expected a throughput of a little over 200,000 metric
\ntons of ore daily this year compared to 129,000 tons daily in
\n1997.<\/p>\n
He said a fourth, newly-built concentrator was currently at
\nthe commissioning stage, and the company expected ore processing
\nto reach between 230,000 tons and 240,000 tons daily by the
\nfourth quarter of this year.<\/p>\n
Despite the increase in output, Jones said he anticipated a
\ndrop in 1998 profits due to a fall in commodity prices from 1997.<\/p>\n
\"The prices for our commodities are significantly depressed
\nright now ... At current prices we would be less profitable in
\n1998 than in 1997,\" he said. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/freeport-not-worried-about-future-despite-instability-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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