Freeport's expansion plan gets govt approval
Freeport's expansion plan gets govt approval
JAKARTA (JP): The government has officially approved PT
Freeport Indonesia's plan to increase its ore output to 300,000
tons per day (tpd) from the current 160,000 tpd, an official at
the Ministry of Mines and Energy said on Wednesday.
Director General of Mining Rozik B. Soetjipto, said the
approval was awarded to the company in a letter issued by his
office dated March 12 this year, but the approval was effective
today.
"PT Freeport Indonesia has agreed upon the four main
requirements set in the principle permit issued by the government
in April 1997," Rozik said after opening a seminar on the use of
lignite.
The four requirements are an increase in royalties payable to
the government, tailing management, environmental protection and
slope stability.
Under its contract of work, Freeport must deliver to the
government between 1.5 percent and 3.5 percent of its copper
sales and 1 percent of its gold and silver royalties.
Freeport, a subsidiary of giant U.S. mining company Freeport
McMoRan Copper & Gold, agreed last month to double royalties from
its copper mine and triple royalties from its gold and silver
mine, in return for increased ore output at its huge copper and
gold mine in Grasberg, Irian Jaya.
The new royalty scheme will be backdated to Jan. 1, 1999 and
effective if ore production at the Grasberg site exceeds 200,000
tpd.
The Grasberg mine is believed to contain one of the world's
largest copper and gold reserves.
Rozik said Freeport had also agreed on the requirements set by
the government with regard to tailing management and
environmental protection.
The government requires Freeport to develop a pilot tailing
management project on a 375 hectares of land around the mining
site within five years.
"They have to start developing the project now, and it should
be completed in five years, so that people can see it and the
disappointment they have long felt is assuaged," Rozik told
Antara.
He promised to keep monitoring the company's activities to
ensure that it meets the requirement.
Freeport has consistently faced criticism from
environmentalists and the local community during its more than
25-year operation in the province, for allegedly causing damage
to the environment. (jsk)