Here, our syndicate discussed about Scenario Planning for PTFI for their Contract Work extension scenario

1. SCENARIO PLANNING
PT. Freeport Indonesia

2. HELLO! We Are Syndicate 3:
Adib Akhmad 29115180
Dian Sadar Adi Pratomo 29115417
Gendis Mailundi 29115371
M. Taufik 29115381
Spencer Paoh 29115416
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3. STEP 1:
KEY FOCAL ISSUE
Creating long term sustainability by continuing
Contract of Work PTFI
PTFI contract Freeport Indonesia's contract to operate the
Grasberg Mine (the world’s largest gold mine and third-largest
copper mine) will expire in 2021 and although an agreement
made in the 1990s allows Freeport to extend the contract by
another 20 years, the mining company would like to have
certainty from the current government as it needs to invest
heavily in underground mining activities at the Grasberg Mine

4. STEP 2:
DRIVING FORCES
The team was able to identify 18 possible
driving forces that triggered PTFI initiative
to get contract extension. PESTLE model
was used to ease the brainstorming
session using a structured model

5. POLITICS
1. General Election
2. Local government election
3. OPM
ECONOMY
10. Initial and On-Going Investment
11. Commodity price
12. Financial benefit
SOCIAL
4. People Perception
5. Changing the Social Status of Papuans
6. Social clashes of local tribes
TECHNOLOGY
13. Application of New Mining Technology
14. Knowledge transfer
15. Knowledge Management
LEGAL
7. Government Regulation
8. Legal Contract
9. WKP
ENVIRONMENT
16. Tailing
17. Geysers
18. Potential Natural Resources

6. UNCERTAINITY
IMPACT
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7. POLITICS
1. General Election
2. Local government election
3. OPM
ECONOMY
10. Initial and On-Going Investment
11. Economic scale
12. Financial benefit
SOCIAL
4. People Perception
5. Changing the Social Status of Papuans
6. Social clashes of local tribes
TECHNOLOGY
13. Application of New Mining Technology
14. Knowledge transfer
15. Knowledge Management
LEGAL
7. Government Regulation
8. Legal Contract
9. WKP
ENVIRONMENT
16. Tailing
17. Geysers
18. Potential Natural Resources

8. STAGE 2:SCENARIO
CREATION –
FRAMEWORK AND
MATRIX
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loose
low
high
tight
Government
Regulation
People Perception

9. STAGE 3:
SCENARIO CREATION –
NARRATIVE
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Legally, this situation is not
beneficial for mining companies
as they will need a license to
operate from the government.
However, the societies support
the mining companies as it
growing the economy
operational activities in existing
location.
This would be the most perfect
condition for Mining companies.
With good society perception
and government support, Mining
companies can easily get the
extension of the working
contract to operation smoothly
and even can expand the
business.
Mining companies getting a lot
of rejection from society and not
being supported by the
government, hence they will not
be able to continue operating in
Indonesia.
With this condition, Mining
companies can still operate. But
they will get rejection from
society that might harm the
company operations.
In long term, it might alter
government policies because
they are being pushed by the
society. Politician could also use
this issue for their interest
Government
Regulation
People Perception

10. STEP 4:
SCENARIO
CREATION –
OPTIONS
CONSIDERATION
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OPTION
Approach to
legislative since
they are represent
the people to
influence
government.
Maintain and
strengthen people
perception through
Good Corporate
Governance
OPTION
Expand services to
other area
Build additional
Infrastructure to
improve services
Increase price to
improve profitability to
cover short term and
long term liabilities for
future growth
OPTION
Provide new
proposals for
contract extension
Extraction of the
application of
technology and
assets with the
most minimum cost
possible
Arbitrage Court /
Legal action. This
would be last option
OPTION
Information
engineering
Sharing information
through 3rd party
endorser
Invite public to see
the actual condition
“seeing is believing”
Implication
People perception of
positive contribution
might triggered
pressure to give
contract of extension
Implication
Contract Extension
Support from the
government
Support from the
community and the
people
Implication
No Contract
Extension
The loss of assets
Loss of expertise
License revoke
Implication
People pressure
might trigger
pressure to
government not to
give contract of
extension

11. STEP 5 :
SCENARIO
CREATION –
INTEGRATION
Early warning
signals
1. Reshuffle Cabinet
– Change of
Minister of Energy
and Mineral
Resources
Might be changing the
current policies and
regulation
2. Indonesian
government
unveiled Law No.
4/2009 on Mineral
and Coal Mining
ordered the mandatory
renegotiation of existing
contracts. the New
Mining Law was a major
setback as it banned
exports of raw materials
and development of
Smelter facilities
3. NGO Protest
Action to retain
environment
sustainability
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5. Nationalization
Assets being take over
by Indonesian
government
6. Political
Conditions in
Indonesia
The possibility of Papua
asking to be separate
from Republic of
Indonesia and corrupt
government officials to
gain personal benefit

12. THANK
YOUAny Questions?
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