Process of Freeport divestment wrapped up: Minister Jonan

Process of Freeport divestment wrapped up: Minister Jonan

PT Freeport Indonesia's open mining area in Timika, Papua, .(ANTARA FOTO/Muhammad Adimaja)

Jakarta, (ANTARA News) - Energy and Mineral Resources (ESDM) Minister Ignasius Jonan said the process of divesting the majority shares of PT Freeport Indonesia to Indonesia has been wrapped up ending long exhausting negotiations.

PT Indonesia Asahan Aluminium (INALUM), the holding company for state-owned mining companies, needs only to pay the price to increase the Indonesian ownership of PT Freeport Indonesia from 9.36 percent to 51.23 percent.

"Yesterday we signed the share sales and purchase agreement under which 51 percent of PT Freeport Indonesia would be owned by the government through PT INALUM. It is now a matter of administration," Jonan said here on Friday.

PT INALUM, Freeport McMoRan Inc. (FCX) and Rio Tinto, signed a number of agreements as a follow up of the signing earlier of Head of Agreement related to the sales of the shares of FCX and participation right of Rio Tinto in PT Freeport Indonesia (PTFI) to INALUM.

The agreements included on share divestment by PT Freeport Indonesia, sales and purchase agreement on the shares of PT Rio Tinto Indonesia (PTRTI), and agreement with shareholders of PT Freeport Indonesia.

Signing the agreements were Chief Executive of INALUM Budi G. Sadikin, and CEO of FCX Richard Adkerson, with ESDM Minister Ignasius Jonan, State Company Minister Rini Soemarno, and Finance Minister Sri Mulyani Indrawati witnessing at the office of the ESDM Ministry here.

The Provincial administration of Papua was given a 10 percent stake in PT Freeport Indonesia.

The process of the divestment would be fully wrapped up after PT INALUM pays the price of US$3.85 billion or around Rp56 trillion to FCX. Payment is to be made before the end of this year.

PT Freeport Indonesia, a subsidiary of the U.S. mining giant McMoRan Copper & Gold, has a large gold and copper mines in Papua.

Parliament Speaker, Bambang Soesatyo, expressed appreciation for the success of the government in negotiation with PT Freeport Indonesia (PTFI) ending with the government through PT INALUM taking over the majority stake.

"I appreciate the step taken by the government and its success in acquiring the majority share of PTFI through Inalum," Bambang said here on Friday.

Many observers and government critics expressed doubt that the divestment would ever take place under the present government even after the Head of Agreement was signed earlier. Reporting by Afut Syafril Nursyirwan. (ASG/E002)

Editing by Eliswanj Azly