Mimika expects 600 billion rupiah royalty from Freeport

Timika (ANTARA) - The Mimika district administration in Papua Province this year expects the revenue from PT Freeport Indonesia's royalty to be Rp600 billion (or about US$42,363,900).

Head of Mimika's Regional Revenue Agency Dwi Cholifa here Wednesday said that the regional revenue target from the profit sharing of PT Freeport Indonesia this year declined compared to that of the previous years.

The closure of the Grasberg open-pit mining operation which affected the decline of PT Freeport's copper, gold and silver concentrate production was the main indicator that the company's royalty payment would be reduced.

"In 2017, we expected regional revenue from PT Freeport to be Rp1.1 trillion. It turned out that the realization was not as big as the target we set. So, this year, we only target around Rp600 billion considering the decline in PT Freeport's concentrate production," Dwi explained.

In the near future, he added the Central Government would transfer the proceeds of PT Freeport's royalty in 2019 of more than Rp100 billion to the Mimika district administration as the producing area.

The Mimika administration has submitted a letter to the Ministry of Finance asking for the payment of a lack of balance funds in 2018 amounting to Rp400 billion and the difference in profit sharing from PT Freeport's 2018 amounting to Rp236 billion.

Dwi revealed that until now, Mimika still relies on regional revenue from profit sharing from PT Freeport's royalties and the transfer of balance funds from the Central Government to finance various development programs.

On the other hand, he said, regional revenues from new sources of Regional Original Income were around 10-11 percent of Mimika's Regional Budget, which this year was set at Rp3.1 trillion or projected at around Rp300 billion-Rp400 billion.

In order to boost the regional income, he said the Mimika administration continued to invite more investors from non-mining sectors.

According to him, land legality in Mimika is still a problem for investors.

Dwi gave an example that there is a claim from a businessman over a 500 hectare land belonging to the Mimika administration located in the Nusantara Port area of Paumako, East Mimika sub district.

"Along with Agriculture and the Fisheries officials, we went down to the area of the Nusantara Paumako Port, Paumako Fish Landing Port, to see any potential for development to bring in regional revenue. Until now, the case is still in court," Dwi explained.

He hoped the land dispute in Paumako Port area would be immediately resolved so that the Mimika administration could build public facilities as a revenue source for the district.

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Reporter: Bambang Purwanto
Editor: Gusti Nur Cahya Aryani