ASEAN KEY DESTINATIONS
US miners blocking renegotiations
Efforts by the Indonesian government to review the so-called contract of work with miners operating in the country have not yielded positive results, as two US companies are impeding the process, a government official said.
American companies Freeport McMoRan and Newmont Mining were the ‘‘stumbling block’’ for the renegotiation process, said Thamrin Sihite, director general of mineral and coal at the Energy Ministry. Thamrin was speaking during a hearing with parliament’s commission VII for energy affairs on Tuesday.
The move is part of the government’s effort to earn more revenue from natural resources, to collect more concession fees from companies, to divest stakes faster to local entities and to reduce the term of the contract.
Timah, a tin producer, and gold miner Aneka Tambang have agreed to the contract changes, Thamrin said. “Sixty percent of the mining companies have agreed. Only Newmont and Freeport have not. We are still working to negotiate with them. What’s important is that the renegotiation should be for the best interest of the country,’’ he added.
Thamrin explained that a government decree issued in 2003 stipulated that the royalty for gold was set at 3.75 percent of the gold price per tonnage for all miners. The government now wants a higher percentage, as gold prices have reached record highs.
In 1991 the contract with Freeport, the world biggest copper producer, had been set at 1 percent.
Ramdani Sirait, a spokesman for Freeport Indonesia in Jakarta said the contract from 1991 “was fair” to all parties involved on gold and copper rates and that they should not be obligated to pay the 3.75 percent rate set in 2003.
Freeport, which has operations in Indonesia’s Papua island, said that they have made significant contributions to the Indonesian government.
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