JAKARTA - Indonesian state auditors have recommended the energy ministry fine Freeport Indonesia for delays in its plan to build a copper smelter, estimating that such a penalty could amount to $501.94-million, a report issued this week showed.
The Audit Board of Indonesia, known by its local language abbreviation BPK, made the recommendation as part of a summary of its audit results in the first half of 2023, which was submitted to parliament on Tuesday.
PT Freeport Indonesia (PTFI), which mines copper and gold in Grassberg in Indonesia's Papua, is operated by US miner Freeport McMoran, but the majority of its shares is owned by Indonesian state-owned company MIND ID.
The company is building a $3-billion copper smelter in East Java, but the project has faced delays.
BPK in its audit found that PTFI has not measured its smelter progress against its initial plan and argued this meant PTFI qualifies to be charged an administrative fine.
PTFI and the energy ministry did not immediately respond to request for comment.