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Freeport's revenue will be down in 2019: ESDM Ministry

Tempo - January 6, 2019

Jakarta (Antara) – The Director General of Mineral and Coal (Minerba) of the Ministry of Energy and Mineral Resources (ESDM) Bambang Gatot Ariyono estimated that PT Freeport Indonesia's (PTFI) revenues would fall in 2019.

Both revenue and income before interest, tax, depreciation and amortization (EBITDA) would decrease, Bambang said on Friday. He further explained that the possibility of the decline was due to Freeport's plan to enter the inner mine.

"In 2020, (Freeport) enters a deep mine, so that it is expected that later in that year, revenue and EBITDA will rise," Bambang told the media after attending a press conference regarding the achievements of the Ministry of Energy and Mineral Resources throughout 2018.

President Joko Widodo announced the repayment of PT Freeport's divestment to PT Inalum (Persero) on December 21, 2018. "It was stated that PT Freeport's shares had already moved 51.2 percent to PT Inalum and had been paid in full. Today is also a historic moment after PT Freeport has been operating in Indonesia since 1973," said the President.

Thus, Indonesia has officially become the majority shareholder by controlling 51 percent of Freeport's shares and the Special Mining Business License (IUPK) for the mining company issued, replacing the Freeport Contract of Work (KK), which has been running since 1967.

Other positive impacts of the majority control of Freeport's shares, as described in the ESDM Ministry's report entitled "Energy of Justice: 4 Years of Performance, Realization Up to 2018", include increasing state revenues, avoiding arbitration courts, and the most complex transfer of mine management technology.

In addition, the government's control of 51 percent of Freeport's shares can also create a "multiplier effect", in which Freeport must complete a smelter within five years in Indonesia.

Source: https://en.tempo.co/read/1162013/freeports-revenue-will-be-down-in-2019-esdm-ministry