Govt to honor Freeport's contract<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Kuntoro
\nMangkusubroto reaffirmed on Tuesday that the government would
\nhonor the mining contract of work (COW) with copper and gold
\nmining company PT Freeport Indonesia.<\/p>\n
\"We are honoring the contract,\" Kuntoro said after opening the
\n26th convention of the Indonesian Petroleum Association (IPA).<\/p>\n
Several analysts and legislators are demanding that the
\ngovernment renegotiate Freeport's COW to give greater benefits to
\nthe state.<\/p>\n
The issue has been fanned by the controversy surrounding
\nalleged collusion and corruption in the renewal of Freeport's
\noriginal contract in December 1991.<\/p>\n
The issue was ignited recently by American scholar Jeffrey A.
\nWinters, who accused Coordinating Minister of Economy, Finance
\nand Industry Ginandjar Kartasasmita of collusive practices
\nconcerning Freeport while he was minister of mines and energy
\nfrom 1988 to 1993.<\/p>\n
Quoting research made by local research company Econit,
\nWinters accused Ginandjar of helping Bakrie Group chairman
\nAburizal Bakrie to gain a 10 percent stake in Freeport. He also
\nsaid the minister helped ALatief Corporation, owned by former
\nmanpower minister Abdul Latief, to acquire Freeport's
\ninfrastructure assets in its mining field in the Grasberg and
\nErstberg area in Irian Jaya.<\/p>\n
An angry Ginandjar has accused Winters of defaming him.<\/p>\n
On an order from President B.J. Habibie, police and the
\nAttorney General's Office have questioned several individuals
\nincluding Ginandjar, Econit president Rizal Ramli and Freeport
\nIndonesia's president Adrianto Machribie.<\/p>\n
Kuntoro said the contract could be renegotiated only if
\n\"Freeport is willing to do so\".<\/p>\n
He refused to specify whether the government would renegotiate
\nthe contract if the Attorney General's Office found
\nirregularities in the renewal of Freeport's COW.<\/p>\n
\"It all depends on what the attorney general says. I'm not in
\na position to recommend any change to the contract.\"<\/p>\n
Freeport Indonesia is 81.28 percent owned by giant U.S. mining
\ncompany Freeport McMoRan Copper & Gold. The remaining shares are
\nheld by the Indonesian government and PT Indocopper Investama
\nCorporation (IIC) with equal 9.36 percent stakes.<\/p>\n
IIC, formerly owned by Bakrie, is now 50.48 percent owned by
\nPT Nusamba Mineral Industri, with the remaining shares owned by
\nFreeport McMoRan (49 percent) and the investing public (0.52
\npercent).<\/p>\n
Aburizal stated on Tuesday that Ginandjar was not involved in
\nhis share transaction with Freeport.<\/p>\n
\"Ginandjar didn't have a role at all in the purchase deal,\"
\nAburizal said after being questioned by officials at the Attorney
\nGeneral's Office.<\/p>\n
Bakrie recounted that he received a letter from the then
\ndirector general of general mining, Kosim Gandataruna, giving IIC
\nthe go-ahead to buy the 10 percent stake in Freeport Indonesia.<\/p>\n
The letter was supplied to the U.S Chemical Bank to obtain a
\nUS$173 million loan to finance the purchase. The loan guarantor
\nwas Freeport McMoRan.<\/p>\n
Aburizal said information that Freeport would sell a 10
\npercent stake to Indonesian companies did not come from Ginandjar
\nbut was public knowledge.<\/p>\n
\"It was just a business opportunity. Those who moved quicker
\nwould get the best (deal).\"<\/p>\n
Meanwhile, Freeport McMoRan confirmed on Tuesday from its
\nheadquarters in New Orleans that the attorney general had asked
\ncompany chairman James R. \"Jim Bob\" Moffett to undergo
\nquestioning.<\/p>\n
The company was quoted by Dow Jones news wire as saying that
\nMoffett was \"more than happy to oblige\" the request, but a date
\nfor the questioning had yet to be set.<\/p>\n
Moffett has \"offered to do anything necessary to get all the
\nfacts on the table and resolve the issues as quickly as
\npossible\", the company said. It added that it considered its COW
\na \"firm, legal contract\" that could be changed only through
\ninternational arbitration. (jsk\/byg)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-honor-freeports-contract-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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