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Free port is required to pay 460 billion rupees of mining royalties to the Indonesian government to compensate for unauthorized use of forest land
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SMM12, 20 Feb: Indonesian Supreme Audit Office (BPK) said on Wednesday that the company must pay Indonesia 460 billion rupees in mining royalties to compensate for the unauthorized use of thousands of hectares of protected forest land. A 2017 state audit of the operation of Freeport's Glasberg Copper Mine in Indonesia, the world's second largest copper mine, showed that miners used more than 4000 hectares of protected forest to store tailings. Freeport denies that it has violated Indonesian environmental regulations, but these issues have delayed the company's plans to sell a majority stake to PT Inalum, the Indonesian state-owned mining holding company. The Indonesian auditor said at a news conference on Wednesday that the Ministry of Environment was establishing a license for 4536 hectares of forest used in the free port and was required to pay unpaid mining royalties within two years.

"I think we can finish it today," M.S. Bakar told reporters.

The damage from the Grasberg tailings is "quite heavy" and the planned revision of the tailings management system will be extended in two phases to 2030 because "it cannot be completed within five years," Bakar said.

Grasberg currently produces up to 200000 tons of tailings a day, she said.

A spokesman for Jakarta-based Freeport said the company could not immediately comment on the latest BPK announcement.

Energy and Mineral Resources Minister Ignasius Jonan said at the same news conference that the government's goal is to issue new mining permits to Glasberg by the end of the year-which requires addressing the issue of environmental permits. A new mining license is needed to complete Inalum's $3.85 billion Grasberg acquisition.

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