Tag: freeport indonesia

Freeport’s Water Tax Dispute with the Papua Government

The Papua Provincial Government have been attempting to collect PT Freeport Indonesia’s tax arrears including its fine for four fiscal years (2011-2015). Freeport is required to pay this tax because the Papua Government claims that Freeport uses water in the Ajkwa river to withstand its tailings deposits (mining residue). Freeport, meanwhile, questioned the Decree of Regional Tax for Surface Water Tax (SKPD PAP) No. 973/1783 dated October 8, 2014. So the tax dispute was brought to the Tax Court. At the beginning of last year, the Tax Court sided with the Papua Government. But in April 2017, Freeport filed for a Reconsideration at the Supreme Court on the grounds that the tax regulation used by the Papua Government could not be applied to Freeport who operates under the Working Contract (KK). The Supreme Court sided with Freeport.

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Lawsuits for Freeport Indonesia

The last two years have been tough for PT Freeport Indonesia. The Company had to deal with extortions, and a challenging contract renewal negotiation with the Government. This was topped with protests from the workers and employees. Things are still going to be rather challenging for the Freeport Indonesia. Some of its officials are suspected of having close ties with judges in the district court, and the allegations have been reported to the Supreme Court and the Corruption Eradication Commission (KPK). In addition to that, Freeport Indonesia must face a lawsuit filed by three individuals related to the ownership of thousands of tons of scrap iron waste.

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Rio Tinto-Freeport Agreement Complicates Settlement for Grasberg

Setttlement of disputes between the government of Indonesia and Freeport McMoRan on the future of PT Freeport Indonesia and Grasberg mine in Papua province has never been easy, even when both sides claim of moving closer to it. Other than domestic politics, competition between ‘power brokers’, and security threats in Papua, an agreement between Freeport and Rio Tinto signed more than two decades ago complicates the issue.

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Mining & The Economy in Fourth Quarter

Pretty much as predicted mining sector improved year-on-year in the third quarter with 1.76% growth, but for the first nine months of 2017 the sector grew only 1.15%. The sector’s contribution to Gross Domestic Product (GDP) growth was 0.14% only from 5.06% growth in the quarter. What to expect in the fourth quarter?

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Freeport Financials & Grasberg’s Future

Shares of Freeport McMoRan (FCX) ended significantly loower by 3.48% in New York last night following the release of the company’s financials for the first nine months of 2017. FCX actually posted net profit of US$280 million in third quarter of 2017, jumped from US$217 million in the corresponding period last year. Investors, however, were not convinced about future of FCX’ operations in Grasberg, Papua.

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Corporate Actions to Watch

Concerns about capital outflow, Fed rate hike, and strengthening of USD do not stop efforts from Indonesian companies to raise funds from both equity and bonds market. PT Bintang Oto Global Tbk, PT Adhi Persada Gedung Tbk, and PT Freeport Indonesia are on their way to raise funds from equity market.

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New Freeport CEO Chappy Hakim

Back in August 2016, we mentioned the name Air Marshall (ret) Chappy Hakim as one of the strongest candidates for becoming the CEO of Freeport Indonesia. And it so happens that Freeport Indonesia have named the Air Force Chief of Staff (KSAU) under Megawati Soekarnoputri’s administration as their new CEO, a position that’s been vacant since January 2016 following the resignation of Air Marshall Ma’ruf Sjamsoeddin. Who is Chappy Hakim?

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Novanto’s New Maneuver

The most recent rumor in politics is about Setya Novanto and his Golkar Party devising a plan to reinstate the former as the Speaker of the House of Representatives (DPR). Assuming the rumor is true, what would be the implications of Novanto returning as the speaker of DPR?

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Maxpower Bribery Case  

On September 27, 2016 the Wall Street Journal reported that the United State’s Justice Department was investigating the Standard Chartered PLC over the allegations that PT Maxpower Indonesia, a subsidiary of Standard-Chartered-controlled Maxpower Group Pte Ltd, had bribed Indonesian Government officials. The bribery allegedly took place between 2012 and 2015 in the amount of US$750,000. Investigators had supposedly obtained several pieces of evidence, one of which is a record of a conversation. The Corruption Eradication Commission (KPK) reportedly had reportedly received information regarding the investigation and had since conducted its own investigation.

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