Jakarta (Greeners) – PT Freeport Indonesia had fulfilled its obligation to offer its share of 10.64 percent or US$ 1.7 billion (Rp 23.6 trillion) to government. The offer was sent by the US company a day before the deadline on January 14 in accordance to the law.
Ki Bagus Hadi Kusuma, campaign manager at Mining Advocacy Network (Jatam), said Freeport’s divestment was just one point of several other requirements for renegotiating the contract.
However, from those other points such as increasing royalty, concession areas adjustment, increasing tax, smelter development, domestic goods and services use, and evaluation and monitoring which seems to be lacking from the government.
“The divestment is just formality so the company was not considered breaking the contract as it was included in the renegotiation,” he said to Greeners, Jakarta, on Saturday (16/01).
Furthermore, the offer made by the company was still too high so if there are no state-owned companies interested then Freeport is free from its obligation for divestment.
“That’s the point. So, no wonder the price was too high or it may be just another strategy to stall time,” he said.
He said that the government couldn’t see Freeport from mere business point of view. If only using business logic, then high price will be responded quickly by market. The government, he added, should have taken the opportunity to also address issues on human rights and environment related to the company’s mining operation in Papua.
“Contract renegotiation should also included those issues, especially Jokowi-JK administration had promised in their campaign to ensure state’s present in Papua,” he said.
Executive Director of Institute for Essential Service Reform, Fabby Tumiwa, said that Freeport McMorran, the parent company of PT Freeport Indonesia, experiencing free fall on its shares, from US$ 23 in May to US$ 4 on Saturday (16/01).
The main reasons are low price on copper and gold, market uncertainty on commodity, low global oil price affecting the company’s income.
Fabby said that divestment had been anticipated by market. The outcome will influence Freeport’s performance in 2016 however, the process might not be finalized in short time.
With US$ 1.7 billion or Rp 23 trillion for 10.64 percent, it is not going to be easy for Indonesian companies to collect that many money to buy the shares.
“In addition, there are no clarity for extending the contract by 2021,” he said adding new stakeholders will have to deal with demands to provide for Freeport’s investment and operational funding.
With low price on copper and gold, potential state-owned companies to buy the shares will be more cautious.
Reports by Danny Kosasih