RI Seeking Renegotiations On Contracts With Freeport

Jakarta (Antara Bali) - Indonesia is seeking renegotiations on its contracts with the two largest gold and copper mining companies in the country, PT Freeport Indonesis and PT newmont Nusantara, a minister said.  

"Many contracts were made 20 to 30 years ago and conditions have now changed and therefore changes need to be made on the contracts," chief economic minister Hatta Rajasa, said after a meeting to discuss the Master Plan for the Acceleration and Expansion of Indonesia Economic Development (MP3EI) here on Thursday.

Hatta said Indonesia had laws and it would implement them  according to the existing provisions.

"It will not be forced. All sides will sit and discuss them. Conditions have changed and so a lot of contracts also need to be changed," he said.

He said renegotiation with Freeport Indonesia and Newmont Nusa Tenggara could be carried out because the royalties they had been paying so far were not based on the correct principles.

PT Freeport Indonesia had refused to renegotiate its working contract on the ground that the contract was still effective and the company also considered the contract with the Indonesian government to be  mutually beneficial.

So far, Freeport had been paying  royalties at the rate of  only one percent for gold and 1.5 percent for copper.