Jakarta, Feb 21 (ANTARA News) – The government will decide whether or not to extend its contract with gold and copper mining firm PT Freeport Indonesia before July 25, 2015, according to Energy and Mineral Resources Minister Sudirman Said.
"There will be a decision on the continuation of Freeports operations before July 25," he said here on Friday.
One of the matters the government will consider before deciding to extend the contract is Freeports plan to invest US$17.3 billion as it still needs certainty, he noted.
Another point will be Freeports great contributions to Indonesia in general and Papua in particular, he added.
According to him, July 25, 2015, is the deadline for the second phase of renegotiations on Freeports contract, which started from January 25 this year.
The minister remarked that the government will revise its regulation number 23 of 2010 on mineral and coal mining activities in order to extend the contract before July 25, 2015.
Under the government regulation, any application for the extension of a mining contract must be filed two years at the earliest or six months at the latest before its expiration.
Freeports contract will expire in 2021, which means the subsidiary of US-based giant miner Freeport-McMoRan Inc. can apply for an extension of its contract only in 2019 at the earliest.
"The government regulation is not realistic because it only gives two years to confirm the investment of US$17.3 billion," he observed.
Chief of the National Smelter Development Team of the Energy and Mineral Resources Ministry Said Didu pointed out that time taken for deciding on the contract must be adjusted as per the characteristics of mining, including the amount of investment.
"It is not realistic to give only two years to Freeport, which will invest US$17.3 billion," he explained.
Ideally, the period for making a decision to extend a contract is between 2 and 10 years before its expiry, he added. (ANTARA)
