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PTFI Ask to Abide with the Rules That Apply in Indonesia

PTFI Ask to Abide with the Rules That Apply in Indonesia

Jakarta, Timerilis.com – The Ministry of Energy and Mineral Resources (ESDM) has asked PT Freeport Indonesia (PTFI) to comply with regulations that have been issued for the obligation to pay export duties.

Ministry of Energy and Mineral Resources Acting Director General of Mineral and Coal Muhammad Wafid emphasized to PTFI to be able to follow the Minister of Finance Regulation (PMK) Number 71 of 2023 concerning Determination of Export Goods Subject to Export Duty and Export Duty Tariffs.

“Yes, regulations are made for everyone,” Wafid said at the Ministry of Energy and Mineral Resources, Tuesday (8/8/2023).

Freeport McMoRan Copper & Gold Inc (NYSE: FCX), the parent company of PTFI, will challenge the Indonesian government’s revised rules regarding the obligation to deposit export duties on copper concentrates.

Based on PTFI’s Special Mining Business License (IUPK), there is no export duty obligation when the progress of smelter construction has reached 50 percent, while PTFI’s smelter in Gresik, East Java has reached 75 percent in the first semester of 2023.

FCX’s plan to file the lawsuit was contained in FCX’s Semester I report document to the US Securities and Exchange Commission on Thursday (3/8/2023).

“The relaxation is extended until May 2024, because there is relaxation so there is also compensation. The government through the Ministry of Finance does the calculation, so it is given the opportunity but the state also gets compensation,” said Wafid.

In FCX’s calculations in the 2023 second quarter financial and operational performance report, PTFI assesses that this export duty policy has the potential to affect the company’s net cash costs for the second semester of 2023.

If PTFI is then subject to the new export duty provisions, the amount is estimated to reach 7.5%. “The imposition of a 7.5% export duty during the second semester of 2023 will have an impact on PTFI’s net cash costs of US$ 0.19 per pound of copper for 2023,” wrote the report, quoted Wednesday (9/8/2023). (Eva/Rd)