Rangga Prakoso & Alin Almanar, Jakarta – Mining giant Freeport Indonesia has submitted its request to extend its permit for concentrate exports, set to expire on Jan. 28.

An Energy and Mineral Resources Ministry regulation stipulates concentrate exports extension requests must be submitted 45 to 30 days before the permit expires. "We have submitted the extension request," Freeport Indonesia spokesman Riza Pratama said in Jakarta on Monday.

Indonesia reviews concentrate export permits every six months, as part of the much-criticized implementation of a mineral export ban policy that came into effect in January 2014.

The government ties in permit extensions with miners' willingness to develop smelters in an effort to add value to Indonesia's raw minerals in-country.

Freeport Indonesia – which operates Grasberg, one of the biggest copper and gold mines in the world – has committed to investing in a $2.3 billion project to expand the capacity of its joint-venture copper smelter in Gresik, East Java.

The government previously granted a permit to Freeport to export concentrates, valid from July 28 this year until Jan. 28, 2016. The permit was granted after Freeport reported to the ministry that the Gresik smelter development had reached 11 percent. Riza declined to provide an updated estimate.

Concession saga

Freeport has been embroiled in a major political scandal this month, after the firm's Indonesian chief reported claims to the Energy and Mineral Resources Minister Sudirman Said that then-House of Representatives Speaker Setya Novanto had attempted to extort the mining giant.

Setya allegedly requested a stake in its divestment plan, estimated to be worth billions of dollars, in exchange for "high level" lobbying to allow the miner to secure contract extensions before its concession ends in 2021.

US-based parent Freeport McMoRan requested certainty for the 2021 extension, after announcing it plans to spend $15 billion in developing underground mining operations at Grasberg.

A government regulation, however, states concession extensions can only be filed within two years of the original end date – 2019 at the earliest in Freeport's case.

Sudirman last week told the Jakarta Globe that the miner had once told him a business plan of such a large scale "won't be feasible" without certainty of an extension. Still, he did not disclose if an extension could be granted sooner than 2019.

The government will consider certain parameters, including reviewing the progress of smelter development and the extent of Freeport's commitment to investing in Gresik, Sudirman said.

Source: http://jakartaglobe.beritasatu.com/business/freeport-submits-permit-extension-eyes-future-reform/