JAKARTA: Copper and gold miner PT Freeport Indonesia (PTFI), a subsidiary of US-based giant mining firm Freeport McMoRan Inc., still may not export concentrates as it is not ready to implement a Trade Ministry regulation on the mandatory use of letters of credits (L/C) for mineral exports, an energy and mineral resources official has said.
The Energy and Mineral Resources Ministry’s director general for minerals and coal, Bambang Gatot Ariyono, said in general, Indonesia’s mining companies, especially Freeport, had not yet agreed on the mandatory use of L/C for their overseas shipments.
He said Freeport had submitted an L/C mandatory use delay request letter to the Trade Ministry so the company could immediately carry out concentrate shipments for its export markets.
“Yes, it has not yet agreed [to the mandatory use of L/C). Most mining companies have not yet agreed to it; however, it is the government’s policy that the application of L/C in mineral and coal exports is required,” Bambang said as quoted by kompas.com on Saturday. He was speaking at the ministry’s mineral and coal directorate general on Friday.
Bambang said all mining companies must adhere to the regulation although he acknowledged that the application of L/C in exports would lead to additional costs.
Bambang said Freeport’s production activities still ran normally although it could not yet export its concentrates. However, a prolonged delay in exports would lead to the piling up of concentrates.
“I don’t know how long they will remain in production because they have not yet communicated about it with us. This indicates that the situation is not yet as bad as many assume,” he said.
