REPUBLIKA.CO.ID, YOGYAKARTA -- Indonesia could take over full operation of the huge copper and gold mines from PT Freeport Indonesia in Papua, an analyst said.

There is no reason for the government to renew the contract of the U.S. company, a researcher at the Center of People's Economy Studies of the Gajahmada University (UGM) Fahmy Radhi said at a discussion titled 'Fury of Freeport Scandal' here on Monday.

PT Freeport Indonesia, a subsidiary of the U.S. mining giant Freeport McMoran Copper & Gold, is seeking to renew its contract which will expire in 2021.

"The president has to decide immediately to reject extension of the contract of work of Freeport," Fahmy said.

He said a 20 percent stake the government wants to have in Freeport Indonesia after holding only 9.36 percent so far, is too small.

The U.S. company, which has been in control of the Indonesian natural wealth since 1967, has reaped huge profit from the copper and gold mines, he said.

"Divestment of 20 percent by the company is too small after the government held only 9.36 percent stake for decades," he said.

Read: Freeport receives positive sign to continue operation

With small and minority share, the government has no control of the minerals exploited and shipped abroad from Papua, he said.

"Explorations and exploitation are all controlled by Freeport McMoRan," he said.

Indonesia could take over full operation of the mines, he said, adding,"we already have trained and experienced human resources after years working with Freeport."

The technology could be bought from the market such as from Japan and fund could be borrowed from international financial agencies.

"If we are serious we could. With such large and valuable assets, many financial agencies would be eager to offer loans," he said.

The government should serious in considering full takeover of the mines, he added.

The revenues from the mines would guarantee repayment of the loans and other state debts, he added.

"The gold reserve in our control would even jack up the rupiah value against the U.S. dollar," he said.

Therefore, the Freeport scandal involving the Parliament Speaker Setya Novanto , should serve as a momentum for President Joko Widodo to optimize gold and copper reserves in Papua to improve the people's welfare, he said.

"At the same time the takeover will end the fight between brokers of Freeport shares," he said.

Freeport is now at the center of controversy with the House Speaker Setya Novanto facing disgraceful dismissal for allegedly asking a stake in the company using the name of President Jokowi and Vice President Jusuf Kalla.

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