REPUBLIKA.CO.ID, JAKARTA -- Coordinating Minister of Maritime Affairs, Rizal Ramli, demanded three things from the US-based mining company, PT Freeport Indonesia, if the company wanted to continue operating in Indonesia.
"First, we ask them to pay a royalty of 6 percent to 7 percent. Previously it was 1 percent," he said in a joint meeting with House of Representatives, in Parliament, Jakarta, Tuesday (13/10).
According to him, at the beginning of New Order era, mining royalties of 1 percent did not matter, because there was no investors yet. However, in contract extension in the mid 80s, he said Indonesia should be more profitable.
"What had happened was the officials were bribed. It caused the contract extension has not changed its 'term' at all," he added.
The Former Minister for Economic Affairs under President Abdurrahman Wahid hoped that it should not happen again. Thus, renegotiation of contract with Freeport would be momentum to rewrite history in the management of mineral.
"Secondly, we asked for clean up the waste. During this time, toxic waste was thrown away in Amungme river. The fish died and people sick," he said.
In fact, according to Rizal, many other Indonesian mining waste was processed before stored underground or discarded. He added, even in the US, nobody dared to violate environmental laws.
Rizal added, Freeport is now experiencing hard times due to losses in its business activity.
"Freeport is trapped, the valuation is down by a quarter compared to 2010. They also suffer huge losses due to an investment of 15 billion US dollars in the Gulf of Mexico. There is no oil and the money is gone. Hence they depend on Indonesian mining," he explained.
Therefore, Rizal assessed that the company would do anything to be able to continue to operate in Indonesia. Furthermore, he said that third demand to Freeport is related to the divestiture.
In fact, a number of other foreign mineral companies such as Newmont had been divested. According to Rizal, acceleration of divestment process will certainly encourage Indonesian state-owned companies to be soon involved in the management of the national mineral resources.
"I'm sure Freeport can accept these three demands, as long as we do not easily be lobbied. I am sure Freeport would give in," he said.
Freeport contract of work signed in 1991 was supposed to end in 2021, but Freeport claimed the return on investment value is estimated to exceed from 2021, so that Freeport asked for a contract extension until 2041.
Ikuti Whatsapp Channel Republika