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Failure in renegotiation reflecting freeport`s arrogance:legislator

28th July 2012 | 2.632 Views
Semarang (ANTARA News) - Failure in contract renegotiation between the Indonesian government and PT Freeport reflects arrogance of the US gold and copper mining company, a lawmaker said.

The government has sought to renegotiate revision of the contract of work held by Freeport which has large copper and gold mine in Papua.

Talks have failed as Freeport has no intention of changing its contract, Dewi Aryani of the Commission VII of the House of Representatives said.

"The country`s dignity has been trampled on and nothing could be done facing Freeport," the legislator from the opposition PDIP faction told Antara news agency here on Saturday.

Dewi said the government wants revision of the contract concerning six points : concession area, extension of contract, royalty , regulation requiring processing and refining of mineral ores in the country , share divestment and the requirement to use domestic mining goods and services.

She said Freeport agrees only on one point that is an increase in gold royalty from 1 percent to 3.75 percent of selling prices.

Royalty is not important for the country compared with other points points, she said.

She said success in the renegotiation with Freeport could have served as a good momentum for reposition of various sectors in dealing with foreign investors.

She cited unclear orientation in the management of the country`s energy sector, which has a complex inter-connectivity with various other vital sectors .

The government has issued a new law on coal and minerals ruling change of the contract of work but implementation has been as protracted as in the re-negotiations.

A regulation has also been issued banning exports of mineral ores forcing mining companies to have their ores processed in the country before being exported.

With the regulation to be effective in 2014 a number of mineral producers have planned to build own processing plants or smelters.

The policy is to create more jobs to ease the country`s unemployment problem. 

(H-ASG/O001)