Indonesia government to appoint Inalum to manage freeport management

The Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan announced on 27 February in Jakarta that the government has planned to take over the management of PT Freeport Indonesia if it wins in the international arbitration tribunal.

For that, the government would appoint state-owned aluminium producer PT Indonesia Asahan Aluminium (Inalum). He said, “The government can; we have Inalum.”

According to Luhut, PT Indonesia Asahan Aluminium (Inalum) has the capability to take over Freeport management as the company is involved in aluminium smelting in Asahan, North Sumatra. He further emphasized that the company is now ready to lead state-owned mining companies under a mining SOE holding company.

Presently, the government is in negotiation with PT Freeport Indonesia over the switch over from Contract of Work (CoW) to a special mining permit (IUPK).

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Richard Adkerson, the chief executive officer of Freeport-McMoRan, the parent company of PT Freeport Indonesia, has given four months’ deadlines to the government to sort out Freeport row. If the government fails to do so the Freeport will take the case to international arbitration.

According to him, the government has violated provisions of the CoW signed in 1991 and Law No. 4/2009 on Mineral and Coal Mining.

Inalum was established by the Indonesian government in cooperation with Japan-based Nippon Asahan Aluminium Co. in 1976