Freeport permit extended for new reserve exploration, says Bahlil
Jakarta — Energy and Mineral Resources Minister Bahlil Lahadalia has said the extension of Freeport-McMoRan's (FCX) Special Mining Business Permit (IUPK) in Papua is an effort to explore new reserves, whilst also serving as a strategy to boost state revenue and maintain production continuity.
Speaking at an online press conference monitored from Jakarta on Friday, Bahlil said the move is also linked to projections that Freeport's production will peak in 2035.
"As it happens, Freeport's peak production period will be around 2035. We know that Freeport's concentrate output currently reaches 3.2 million tonnes of copper concentrate ore per year — prior to the incident — yielding roughly more than 900,000 tonnes of copper and approximately 50 to 60 tonnes of gold," Bahlil said.
"Because 2035 marks the production peak, we believe it is important to find solutions to ensure the continued existence and sustainability of operations in Timika, Papua," he added.
The minister said the Indonesian government, MIND ID and Freeport have been engaged in intensive discussions regarding the permit extension framework.
Indonesia's ownership share currently stands at 51 per cent. Through the permit extension, the government will obtain an additional 12 per cent divestment of shares at no acquisition cost.
Under this arrangement, Indonesia's ownership is expected to reach 63 per cent by 2041. A portion of the additional 12 per cent will be allocated to the Papua regional government as the producing region.
Bahlil also expressed hope that the permit extension would sustain business operations and open employment opportunities in Papua, as well as drive increases in regional revenue and non-tax state revenue (PNBP).
"With the extension to 2041, state revenue is expected to be significantly higher than current levels, including royalties and other taxes, particularly on gold," Bahlil said.
Previously, Investment and Downstreaming Minister and Head of the Investment Coordinating Board (BKPM) Rosan Roeslani announced that the Indonesian government and US-based mining company Freeport-McMoRan (FCX) had signed a Memorandum of Understanding (MoU) regarding the extension of the Special Mining Business Permit (IUPK) at Grasberg, Central Papua.
The extension covers the period 2041–2061. Rosan said the investment value under the extension amounts to US$20 billion over the next 20 years.
Speaking at an online press conference monitored from Jakarta on Friday, Bahlil said the move is also linked to projections that Freeport's production will peak in 2035.
"As it happens, Freeport's peak production period will be around 2035. We know that Freeport's concentrate output currently reaches 3.2 million tonnes of copper concentrate ore per year — prior to the incident — yielding roughly more than 900,000 tonnes of copper and approximately 50 to 60 tonnes of gold," Bahlil said.
"Because 2035 marks the production peak, we believe it is important to find solutions to ensure the continued existence and sustainability of operations in Timika, Papua," he added.
The minister said the Indonesian government, MIND ID and Freeport have been engaged in intensive discussions regarding the permit extension framework.
Indonesia's ownership share currently stands at 51 per cent. Through the permit extension, the government will obtain an additional 12 per cent divestment of shares at no acquisition cost.
Under this arrangement, Indonesia's ownership is expected to reach 63 per cent by 2041. A portion of the additional 12 per cent will be allocated to the Papua regional government as the producing region.
Bahlil also expressed hope that the permit extension would sustain business operations and open employment opportunities in Papua, as well as drive increases in regional revenue and non-tax state revenue (PNBP).
"With the extension to 2041, state revenue is expected to be significantly higher than current levels, including royalties and other taxes, particularly on gold," Bahlil said.
Previously, Investment and Downstreaming Minister and Head of the Investment Coordinating Board (BKPM) Rosan Roeslani announced that the Indonesian government and US-based mining company Freeport-McMoRan (FCX) had signed a Memorandum of Understanding (MoU) regarding the extension of the Special Mining Business Permit (IUPK) at Grasberg, Central Papua.
The extension covers the period 2041–2061. Rosan said the investment value under the extension amounts to US$20 billion over the next 20 years.