Freeport Says It Will Challenge $469m Indonesia Water Tax Case
Jakarta. Mining giant Freeport McMoRan said its Indonesian unit, facing $469 million in water taxes and penalties in Papua province dating back to 2011, will contest a ruling by a local tax court that rejected its lawsuit on the matter.
Freeport said in documents accompanying earnings disclosure on Wednesday it "expects to challenge this decision at Indonesia's Supreme Court and is evaluating its options".
A spokesman for Freeport Indonesia declined to comment on the matter. The unit is currently in talks with the Indonesian government about changing the terms of its mining rights, a move whereby Indonesia expects the company to pay more taxes than under its existing contract.
The miner is one of Indonesia's biggest taxpayers, with direct contributions of more than $16 billion to Southeast Asia's biggest economy in taxes, royalties, dividends and other payments between 1992 and 2015 according to company data.
Freeport said the court had issued a ruling "for additional taxes and penalties related to surface water taxes for the period from January 2011 through July 2015 in the amount of $376 million", including $227 million in penalties.
The company is also being asked to pay a further $93 million for similar taxes and penalties for August 2015 to December 2016, it said.
Earlier, Indonesia's Papua province, home of Freeport's giant Grasberg copper mine, said it had won a court battle in a claim against the company for Rp 2.51 trillion ($188 million) in outstanding surface water taxes from 2011 to mid-2015. There was no mention of penalties.
Indonesia's tax court rejected a lawsuit lodged by Freeport Indonesia over claims for taxes on water the company used from the Aghawagon and Otomona rivers, it said, referring to a verdict from Indonesia's Tax Court on January 18.
Freeport, which used the water to suspend its tailings in the Ajkwa River, about 120 kilometers away, had argued that a substantially lower tax rate should be applied, as set out in its contract of work signed in 1991, it said.
Indonesia's Tax Court could not be reached for comment.
Reuters
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