Indonesia, Freeport still differ on IUPK scheme

The government and Freeport Indonesia are still not in agreement over several aspects of the latter’s contract of work (CoW) conversion to a special mining permit (IUPK), an official has said.

The Energy and Mineral Resources Ministry’s secretary-general, Teguh Parmudji, said for example, that Freeport Indonesia, a subsidiary of the United States-based mining giant Freeport-McMoRan, had demanded a separate financial agreement.

“We have explained that under the IUPK scheme, it is unlikely,” Teguh said as reported by on Monday in response to documents submitted by Freeport.

Teguh said last week that Freeport had submitted a document to be negotiated with the government, covering fiscal policy, the conversion from the CoW to IUPK and the divestment of the company’s stocks.

Under the document, the mining company also only agrees to 30 percent share divestment, instead of 51 percent, as demanded by the government.

“The divestment of 51 shares is a presidential order,” he stressed.

Teguh added that the government had offered Freeport an extension of its operational permit up to 2031 as long as the company agreed to the IUPK scheme, including the 51 percent stock divestment.

Freeport Indonesia spokesman Riza Pratama refused to comment on the government’s offer. “In the CoW, [the permit] could be extended for another 20 years,” he said.

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