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Indonesia Updates Mining Rules for PT Freeport’s Contract

Indonesia Updates Mining Rules for PT Freeport’s Contract
Indonesian President Joko Widodo while visiting Grasberg PT Freeport Indonesia

Jakarta, Timerilis.com – The Indonesian government has revised the mining regulation, Government Regulation (PP) Number 96 of 2021. This change aims to support PT Freeport Indonesia’s (PTFI) early request for a contract extension.

Under the original rule, companies had to apply for contract extensions at least five years before expiration. PTFI’s current contract runs until 2041, but the company has already requested a 20-year extension to 2061.

Arifin Tasrif, the Energy and Mineral Resources Minister, said they are now harmonizing the revised regulation, focusing on Article 59.

“We should explore further if the mine still has potential, ensuring operational certainty,” Arifin said on Friday (1/12/2023).

He added that PTFI’s contract extension could boost state revenues, enhance downstream activities, and secure investments.

“This situation is unique to Freeport, but it can guide future decisions if it benefits the country. Benefits might include more smelters, a bigger government share, and meeting downstream obligations,” Arifin explained.

President Joko Widodo also discussed increasing PTFI’s shares by 10% and extending the contract with Freeport McMoRan’s Chairman, Ricard Adkerson, in Washington DC.

“I’m glad that our talks about increasing Freeport’s shares in Indonesia by ten percent and extending the mining permit for 20 years are almost final,” Jokowi said last Tuesday (14/11/2023).