Irian Jaya may acquire Freeport stake
JAKARTA (JP): The central government gave the green light for the Irian Jaya administration's plan to acquire holdings in the copper and gold mining giant PT Freeport Indonesia.
The director general of general mining at the Ministry of Energy and Mineral Resources, Surna Tjahjadiningrat, said that the government wholeheartedly supported the plan and would help the Irian administration realize their ambition.
"In my opinion, politically that's necessary, and we totally agree with the wish of the Irian Jaya administration," Surna told journalists.
He warned that the plan would not be able to be realized immediately, as New Orleans-based Freeport McMoran had so far refused to divest its ownership in Freeport Indonesia because of Government Regulation (PP) No. 20/1994 that allows 100 percent ownership by foreign investors in the mining industry.
Freeport, under its contract of works with the government, is actually required to divest stocks to local entities. However, the company continuously hides behind the PP 20/1994 regulation.
Surna said the government was considering the revocation of PP 20/1994 to force Freeport to divest its stakes to local entities.
When asked about the funding to acquire Freeport stakes, Surna said that the Irian Jaya administration could use royalties and community development funds received from Freeport. (rid)