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Indonesia yet to complete Freeport audit - minister

Source
XFN-ASIA - July 14, 2006

Jakarta – A comprehensive audit on the operation of PT Freeport Indonesia, which was initially expected to be completed last month, is not finished yet, Energy and Mineral Resources Minister Purnomo Yusgiantoro said.

"Today we just listened to a report from the audit team on the five subjects. We will have other meetings," he told reporters following a meeting with the audit team.

The five subjects of the audit are environmental impact, security, community development, production and revenue.

Separately, Witoro Soelarmo, the ministry's technical environmental director who chairs the audit team, said he hopes the final result will come out in two weeks.

The ongoing audit was partly sparked by violent protests back in March, requesting the closure of Freeport's gold mine operation in Papua.

The company has been variously accused of not giving enough to the people of Papua in return for the mine, and of polluting and being responsible for human rights abuses through their use of the military for protection.

Under its contract, Freeport must make royalty payments to the government of between 1.5 and 3.5 pct of its copper sales and 1 pct of its gold and silver sales. The government is also entitled to receive dividends for its 9.36 pct stake in Freeport.

Company sources have said that Freeport's total payment to the government in dividends, taxes and royalties in 2005 was estimated at 1.09 bln usd, compared with 260 mln in 2004 and 334 mln in 2003. The sharp rise was attributed to price and production increases. PT Freeport is a unit of Freeport-Mcmoran of the US.

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