Indonesia now holds majority of shares of Freeport

Indonesia now holds majority of shares of Freeport

State-Owned Enterprises Minister Rini Soemarno (left), Finance Minister Sri Mulyani (second from left) and Energy and Mineral Resources Minister Ignasius Jonan (right), witness Freeport CEO McMoRan Richard Adkerson (third from left) and President Director ofPT Inalum Budi Gunadi Sadikin signing the Sales and Purchase Agreement at the Energy and Mineral Resources Ministry on Thursday (Sept 27/, 2018). Indonesian state-owned mining holding company PT Inalum, has signed the Sales & Purchase Agreement (SPA) with PT Freeport-McMoRan Inc dan PT Rio Tinto Indonesia. ANTARA FOTO/Galih Pradipta/pras.

Jakarta, (ANTARA News) - The Indonesian government officially became the majority shareholder at PT Freeport Indonesia following the signing of a number of agreements at the Ministry of Energy and Mineral Resources here on Thursday.

"Yes, the divestment process in PT Freeport has now been finished, leaving only the administrative process that has to be completed by Freeport and Inalum," Energy and Mineral Resources Minister Ignasius Jonan said, after witnessing the signing of the agreements.

Indonesian state-owned mining holding company PT Inalum, Freeport McMoRan Inc. (FCX) and Rio Tinto signed a number of agreements to follow up the Head of Agreement regarding the sales of CFX shares and Rio Tinto`s participating right in PT Freeport Indonesia to PT Inalum here on Thursday.

The agreements include PT FI`s divestment agreement, PT Rio Tinto`s shares sales and purchase agreement, and an agreement on PT FI shareholders.

The agreements were signed by PT Inalum`s president director Budi G.Sadikin and FCX`s CEO Richard Adkerson, witnessed by Minister Jonan, State Enterprises Minister Rini Soemarno and Finance Minister Sti Mulyani.

Under the agreements, PT Inalum`s shares at PT FI have now increased from 9.36 percent to 51.23 percent, while the regional governments of Papua will receive 10 percent of 100 percent shares of PT FI.

The change in the shareholding will be official after payment of US3.85 billion (Rp56 trillion) to CFX, which is to be completed before the end of this year.

"Following the signing of the agreements, the government will issue IUPK (mining license) for a period of 2x10 years until 2042," Jonan said.

PT FI`s obligation to build a copper smelter with a capacity of 2 to 2.6 million tons would continue to be monitored and evaluated with regard to its progress, Jonan said, adding that the project was expected to finish in less than five years.

Minister Rini Soemarno said Inalum`s commitment to meeting the target of the settlement of the divestment was worth praising.

Finance Minister Sri Mulyani, on the other hand, said, "With regard to support investment for Freeport and Inalum, the government had given certainty regarding tax obligations and non-tax obligations at national and regional levels that must be met by PT FI."

With the conclusion of the divestment process, and following a change from a working contract (KK) to a mining business license (IUPK) system, it is assured that PTFI`s contribution to state income will be larger in the aggregate.

Reporting by Afut Syafril Nursyiwan
Editing by Yoseph Haryadi