Tembagapura, Papua. Finance Minister Sri Mulyani Indrawati visited Freeport Indonesia’s underground mine in the Papua’s highland area of Tembagapura on Sunday to see firsthand how “the country’s valuable asset” operates.
She urged Freeport to increase productivity now after the company employs the underground mining method while managing risk proactively and performing the duty to protect the environment.
Freeport needs to increase the production of silver, gold, and copper after moving to underground mining activities “which offer different challenges from mining above the surface”, Sri Mulyani said.
The Indonesian government has acquired a 51 percent stake in Freeport Indonesia since 2018 and issued a special mining license, locally abbreviated as IUPK, to allow the company to resume mining operations under certain requirements.
“Since the negotiation of the IUPK in 2018, Freeport Indonesia has made significant contributions in the forms of dividends, royalties, and tax payment,” Sri Mulyani told BTV news broadcaster at the mining site.
“It is now an asset to the country so Freeport must bring benefits to the Indonesian people, to the people in Papua, and certainly establish a firm foothold as a corporation,” she added.
According to the government, Freeport Indonesia contributed $7.5 billion in state revenue last year, while spurring the GDP growth in the local district of Mimika.
President Joko Widodo said in August that Freeport’s contribution to the provincial GDP growth of Papua accounts for 34 percent.
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Under the IUPK, Freeport Indonesia is required to build and operate its own smelter, which is currently under construction in the East Java town of Gresik.
The smelter is set to become operational in May 2024 and is estimated to give significant added value to its exports.
“[The smelter] will certainly strengthen both the Indonesian economy and Freeport Indonesia,” Sri Mulyani said.
“I hope that as a highly valuable mining center, Freeport Indonesia will execute the working contract according to its mining license and the good governance principles while incorporating work safety for all communities and workers here and empowering the people of Papua.”
Freeport Indonesia Chief Executive Officer Tony Wenas said the 2018 agreement clearly outlined the company's operating foundations, including fiscal incentives from the government, mining periods, and taxes it has to pay.
“What we need to do now is to continue production in safe and sustainable ways for the biggest benefit of the country,” Tony said.
BTV reporter Stefani Ginting contributed to this story.