Rendi Akhmad Witular, Jakarta – PT Freeport Indonesia should increase the revenue it shares with the government from its Papua mines amid lucrative prices of copper and gold, Vice President Jusuf Kalla says.

Kalla said an interdepartmental team would review the revenue portion received by the government and administrations in Papua from the local unit of US giant Freeport McMoRan Copper & Gold Inc.

"With rising gold and copper prices, Indonesia should get double or triple the current revenue sharing," said Kalla at a weekly media conference Friday. He added the team would also investigate allegations that the company polluted the local environment at its Grasberg mine.

Kalla, a businessman-turned-politician, said the bigger slice of revenue would help develop Papua, the country's most isolated and poorest province, with more than 70 percent of the revenue earmarked for local administrations.

"We just don't want to see special autonomy being implemented (in the province), but the revenue share for the province is small compared to the results obtained by Freeport," he said. Kalla stopped short of saying that the government wanted to change the existing mining contract of Freeport.

New Orleans-based Freeport McMoRan controls an 81.28 percent stake in Freeport Indonesia, with 9.36 percent owned by the government and another 9.36 percent held by locally registered investment firm PT Indocopper, which is controlled by Freeport McMoRan.

With a stake of some 9.36 percent, the government takes in between US$25 million and $30 million in royalty proceeds annually from Freeport, according to Finance Ministry figures.

The government is only entitled to 20 percent of the proceeds, with the remaining 16 percent going to the provincial administration Papua and 64 percent to the administration of the Timika regency, where the Freeport mining site is located. Aside from royalties, Freeport also pays corporate income tax to the central government, which amounted to $168 million in 2004, according to the ministry.

The Papua administration plans to acquire the stake owned by Indocopper. However, the administration is facing difficulties in raising funds to finance the acquisition, valued at about $700 million.

Calling the current allocations unfair, Papua has long sought a revised split of the profits earned by Freeport from operations at Grasberg, the world's largest gold and second largest copper producer.

Aside from the royalty issue, the Papua administration has also urged the government and Freeport to show greater commitment to the development of the country's easternmost province.

Freeport recently came into the spotlight following an allegations it paid millions of dollars in fees to the Indonesian Military (TNI) for protecting the company's site in Papua.

The Office of the State Minister for the Environment has also accused Freeport of polluting the local environment. Energy and Mineral Resources Minister Purnomo Yusgiantoro said Tuesday the government would review Freeport's mining contract if the company was proven to have polluted the environment from an interdeparmental team's investigation.