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Freeport claims to be targeted by the media

Source
Jakarta Globe - September 18, 2012

Tito Summa Siahaan – There are two sides to every coin, but according to the chief of Freeport Indonesia, the local unit of US mining giant Freeport McMoRan Copper & Gold, the media often go out of their way to tie the company to bad news, such as shootings near its Papua mine, or a royalty rate that is considered by many as too low.

"It is understandable because they probably don't get their information accurately," said Rozik B. Soetjipto, president director of Freeport Indonesia, which runs the world's largest gold mine in Papua.

Violence is a continual concern in the province. On Monday, gunmen fired on two Freeport Indonesia-owned cars along the road between Timika and the Grasberg mine operated by Freeport Indonesia, but no casualties were reported, police said.

On Friday, another Freeport Indonesia vehicle – this one carrying Indonesian Military officers – was shot at in the same area.

But those recent shootings are not the miner's only headache. According to Rozik, a former director general at the Energy and Mineral Resources Ministry, the media through their coverage are trying to back the company into a corner regarding the highly contentious issue of contract negotiations over the royalty rate.

But Rozik said that, in the rush to cover contract negotiations, the work that Freeport Indonesia has done to help the local community has been overlooked.

He said that company officials understood the need to renegotiate the royalty rate in order to speed development in Papua, which is one of Indonesia's poorest provinces. But in exchange, he added, Freeport Indonesia needs the government to support its massive investment plan.

"The resources in Grasberg are very large, and some said there will be enough to last until 2041," Rozik said. "Some say until 2055. To manage this massive amount of resources is not a simple task."

Rozik said Freeport Indonesia plans to spend $10 billion through 2021, and $80 billion through 2041 to further develop the Grasberg mine. "We need assurances that we can perform our work until 2041," he added.

Freeport Indonesia currently holds a contract that will end in 2021, but a stipulation states that it can be extended for another 20 years. New mining regulations have since been passed to force companies like Freeport Indonesia to increase their royalty rates. Freeport Indonesia's royalty is 1 percent, but the government is pursuing a 10 percent royalty rate.

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