For both Indonesia and Freeport, it’s about time to face the facts

By Johannes Nugroho
Jakarta Globe

indo160Perhaps unbeknown to many, the chief executives of both Freeport McMoRan Copper & Gold and Newmont Mining have been jetting in and out of Jakarta recently to conduct high-level talks with the new coordinating minister for the economy, Chairul Tanjung. While the local media speculates on whether Richard Adkerson, CEO of Freeport, has been lobbying the minister to have its contract renewed beyond 2021, the talks primarily dealt with the resumption of Indonesia’s exports of copper concentrates, which stalled after the new mining regulation came into effect in January.

The new regulation, which requires foreign mining companies to build smelters, is part of the government’s patriotic push to maximize revenues from the mining sector. The nationalistic bend is likely to be picked up by the new government after the July presidential election as both candidates for the country’s top job seem eager to be seen as putting national interests above those of foreign companies.

The biggest foreign stakeholder in Indonesia’s mining sector is without a doubt Freeport Indonesia which is the operator of the world’s largest gold mine and third largest copper mine at Grasberg in the province of Papua. The US company’s 40-odd-year operation has indeed become a polemic among Indonesians, many of whom see the company as a symbol of foreign exploitation of the country’s natural resources, leaving behind an environmental time bomb in its wake.

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