Jakarta – Finance Minister Sri Mulyani Indrawati has warned gold and copper miner PT Freeport Indonesia that if it ceased production its share prices would be sharply affected.
"Freeport is a public company. If it stops production, its shares will fall," said Sri Mulyani in Jakarta on Wednesday as reported by kontan.co, adding that there would be no winner in the dispute.
The company has reportedly stopped producing concentrate at its mining site in Papua following a dispute with the government over the requirement that it convert its contract of work (CoW) to a special mining license (IUPK).
Previously, Freeport McMoRan president and CEO Richard C. Adkerson said the 2009 Mineral and Coal Mining Law stipulated that the CoW signed in 1991 was still valid, but the government had requested that Freeport convert the contract.
The company, which insists that the government has to respect the CoW, has reportedly stopped production, claiming that its storage space is full of concentrate after it failed to obtain an export license.
Sri Mulyani expressed the hope that Freeport would cooperate with the government. "We have continuously told Freeport that any regulation [contract] would maintain the stability of its economic activities. But at the same time, we [the government] have to uphold prevailing laws," said Sri Mulyani.
The government has given the company six months to adjust to the new contract, as per the law. (bbn)