REPUBLIKA.CO.ID, JAKARTA -- Energy and Mineral Resources (ESDM) Minister Ignasius Jonan said he hopes to wrap up the process of share divestment of PT Freeport Indonesia (FI) before the end of this year. Jonan said the draft of the share divestment terms has been prepared, adding "it needs only payment transaction." 

Issue related to the environment has been almost settled, he said, adding the government sorted out problem one by one. Jonan said PT FI has agreed to build smelter or mineral refinery in Indonesia.

"Freeport Indonesia has agreed (to build the smelter), therefore, there should be no problem," he said on Wednesday.

Meanwhile, the Supreme Audit Agency (BPK) said in the implementation of its working contract, there are problems that need correction related to the use of 4,536 hectares of protected forest land without permit and the disposal of mining tailing that caused serious damage to the ecosystem.

The Fourth member of BPK Rizal Djalil said there was a shortfall in non tax state revenue ((PNPB) and an excess of US$1,616,454.16 in the disbursement of reclamation guarantee.

Rizal said BPK recorded at least five points of following steps after the findings. First, related to the use of 4,536 hectares of protected forest land, already in the phase of finalization by the Ministry of Environment and Forestry and PNPB of Rp460 billion from the use of the forest land.

Second, related to disposal of the mining waste for which PT FI already made a roadmap for the settlement of the problem and it has discussed it with the Environment and Forestry Ministry.

Third, related to shortfall in the state revenues in the form of PNPB and the excess of US$1.6 million in the disbursement of reclamation guarantee, which is already settled based on regulation.

Fourth, that the ESDM and Environment and Forestry Ministries have renewed regulation on the management of mining service business in line with the recommendation of the BPK. The purpose if to prevent potential deviation in the future.

Fifth related to the mechanism of granting 10 percentage point share of the PT FI shares for Papua. The mechanism is fully left to the government.

Jonan said the five point agreement with Freeport McMoRan, the parent company of PT FI has been in the final point. He explained, currently there are only two points to be settled by the Environment and Forestry Ministry and Finance Ministry.

He said the first point related to the divestment, for which PT Inalum has been ready for finalization. Inalum needs only to wrap up the divestment with payment.

Second point is that Freeport has agreed change its working contract into special mining business license (IUPK). The third point, they have agreed to build a smelter in five years after the IUPK is approved and issued.

As for contract extension, the government will allow renewal of contract for Freeport 2x10 years in line withe regulation. IUPK will be effective until 2031 and renewal for 10 years would be evaluated.