Freeport mine shares granted for local administrations in Papua

Miners working underground in Tembagapura, Papua, last July. Image: Jakarta Post/Kompas File

Local administrations in Papua will get shares from PT Freeport Indonesia when the company divests its 51 percent shares, as required by a new regulation, says Indonesia’s Coordinating Maritime Affairs Minister Luhut Pandjaitan.

“Yes, they [the administration] will get [the shares]. The percentage of shares will be discussed later,” Luhut said after meeting Mimika Regent Eltinus Omaleng in Jakarta on Tuesday as reported by tempo.co.

Luhut said the central government would also discuss with relevant parties the mechanism for which the shares would be transferred to local administrations.

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Meanwhile, after the meeting, Eltinus said Luhut mentioned the figure would be between 10 percent and 20 percent, which Luhut said had been demanded by the regent.

Eltinus said the shares for Papuans would be distributed to the Papua administration, Timika administration and the people holding rights to customary communal land near the copper and gold mining site.

President Joko “Jokowi” Widodo signed on January 11 Government Regulation (PP) No. 1/2017, a revision to PP No. 23/2010 on the implementation of the mineral and coal mining business.

Under the regulation, mining companies are required to construct a smelter as a precondition for them to export the concentrates.

The companies, including Freeport, are also required to change contracts of work (CoW) to a special mining licence (IUPK). With the IUPK, foreign companies are also required to divest 51 percent of their shares.