Freeport Must Conform to Export Duty Regulation: Official

Jakarta (Antara) - PT Freeport must comply with the regulations on progressive tax, ranging between 25 to 60 percent, on the exports of copper concentrates in the period between 2014 and 2016, stated a senior official. "The export duty regulation must be implemented," noted Director General for Mineral and Coal Affairs of the Ministry of Energy and Mineral Resources R. Sukhyar. The director general made the remarks after accompanying Minister of Energy and Mineral Resources Jero Wacik to a meeting with Chief Executive Officer (CEO) of Freeport-McMoRan Copper & Gold Inc. Richard C. Adkerson here on Thursday. Based on the Finance Minister's Regulation No.6/PMK.011/2014, PT Freeport must pay 25 percent export duty for its copper concentrate exports in 2014. Jero Wacik reported that the PT Freeport executive met him for seeking clarifications on the implementation of the Law No. 4/2009 on Mineral and Coal Mining. "They understand their obligation to build a smelter," he emphasized. On the occasion, Jero also explained that there were 25 smelters which will soon become operational and some had already commenced operations. Some of them will become operational by the end of 2014 and others by mid-2015. "After the smelters become operational, the small miners can resume their mining operations and sell their produce to the domestic smelters," he claimed. Earlier, law professor at the University of Indonesia Hikmahanto Juwana had urged the government to stay firm on its decision even if PT Freeport and PT Newmont Nusa Tenggara filed an arbitration lawsuit against the imposition of the export duty on mineral concentrate exports. "The government has a strong legal position," he stated. The finance minister's decree No.6/PMK.011/2014 stipulates the imposition of the progressive export duty of 25-60 percent, between 2014 and 2016. For copper concentrates, the export duty will be 25 percent in 2014, 35 percent in 2015, 40 percent in the second semester of 2015, 50 percent in the first semester of 2016, and 60 percent in the second semester of 2016. Apart from copper, the export duty on iron concentrates, manganese, lead, zinc, iron ilmenite, and titanium will be 20 percent in 2014, 30 percent in the first semester of 2015, 40 percent in the second semester of 2015, 50 percent in the first semester of 2016, and 60 percent in the second semester of 2016. (*)