Thank you for your invitation for PT Merdeka Copper Gold Tbk (MCG) to respond to the allegations against our subsidiaries, PT Bumi Suksesindo (BSI) and PT Damai Suksesindo (DSI).

Background

PT Bumi Suksesindo (BSI), holder of Mining Business License for Operation Production (IUP OP) No. 188/547/KEP / 429,011 / 2012; and has been designated as a National Vital Object (Obyek Vital Nasional/Obvitnas) according to Minister of Energy and Mineral Resources of the Republic of Indonesia No. 651/30/MEM/2016, which operates the Tujuh Bukit Mine in Sumberagung Village, Banyuwangi Regency, East Java Province, Indonesia. While PT Damai Suksesindo that holds Mining Business License for Exploration No. P2T/83/15.01/V/2018; DSI current activities is limited to geological mapping.

 During the Covid-19 condition, BSI is still allowed to operate under the directive of the Ministry of Energy and Mineral Resources Letter No. 02.E/04/DJB/2020 regarding the Prevention and Handling of Corona Virus Disease 2019 (Covid-19) and The Governor of East Java Regulation No. 18/2020 regarding Large Scale Social Limitation Guidelines in Handling Corona Virus Disease 2019 (Covid-19), BSI continues operation with strict Covid-19 protocol to ensure the safety of our employees and the community at large.

Allegations

Referring to the allegations regarding the incident, it was not a tent demolition by BSI, but by illegal acts by local anti-mining group that started with a blockade of BSI logistics convoy and continued with the destruction homes and property of employees, workers, and residents who are considered to support BSI mining operations.

Below is the chronology of the incident:

• The incident referred began on Thursday, March 26, 2020, at 21:00, when around 50 anti-mining mob blocked the BSI logistics vehicles at Lohwi T-junction, not far from the Sumberagung Village Office, Pesanggara District. The blockade was dispersed by the Banyuwangi Police on Friday afternoon, March 27, 2020. Not long after the police left the location, the anti-mining group who were dissatisfied because the blockade was opened, turned violent and intimidated BSI employees who happened to be passing by. A female BSI employee was slightly injured because she was kicked down from her motorcycle.
• The incident sparked the anger of BSI workers and local residents, who then took the fight. The police returned to the location, gathering BSI workers and members of the community who were thought to be supporting the mine, which had already reached 130 people, securing them at BSI's External Affairs (EA) Office. These workers and members of the community are ordered and guarded so as not to retaliate against the anti-mining group.
• The anti-mining mob continue to gather in a tent built not far from the gate of the Pancer hamlet. And on Saturday, March 28, 2020 around midnight, carried out an attack on the Pancer hamlet. The mob targeted homes and property of BSI workers and residents deemed to be support BSI, whose male occupants are being collected by police at the BSI EA Office.
• As a result of anti-mining's vandalism, 60 motorcycles (including those belonging to journalists who were covering the incident), 2 automobiles, 13 houses, and 1 place of business owned by BSI workers and residents were damaged. In this incident a child was also the victim of a stone throwing by the anti-mining mob.  Several BSI workers vehicles which were left on the orders of the police around the Sumberagung Village Office were also damaged by the anti-mining mob.

The above incident is a recent effort with a local anti-mining group with the support of the Indonesian Forum for the Environment (Wahana Lingkungan Hidup/Walhi) to disrupt BSI activities.  These disruptions particularly increased since October 2019, when BSI began exploration in the Lompongan area which is legally within BSI IUP area.

BSI has so far prioritized dialogue with the anti-mining group and Walhi although BSI offer has been rejected.  Since October 2019, The anti-mining group has consistently harassed BSI employees, workers and residents who support BSI operation that in fact violate their right to work and live peacefully.  While, several assaults and violent acts (the latest on 28 March 2020) by the anti-mining group has been reported and are under investigation by law enforcement authorities.

I hope that the above clarifies the incident, please do not hesitate to contact me should you require further information.