President wants Freeport divestment process wrapped up this year

President wants Freeport divestment process  wrapped up this year

President Joko Widodo ensured that Indonesia through PT Indonesia Asahan Aluminum (INALUM) immediately became the majority shareholder of PT Freeport Indonesia (PTFI) at the end of 2018. (Palace Press Bureau)

Jakarta (ANTARA) - President Joko Widodo said he wants the process of takeover of the majority 51 percent stake in PT Freeport Indonesia by state-owned aluminum company Inalum to be wrapped up this year.

The Indonesian government and the U.S. based mining giant Freeport McMoRan Inc have reached an agreement that Inalum will take control of a 51.23 percent stake in PT Freeport Indonesia, ending more than nine years of negotiations over control of Grasberg, the world`s second-biggest copper mine in Papua.

The government has named Inalum, the holding company for state-owned mining companies to take over the 51 percent stake in PT Freeport Indonesia.

On Thursday, Jokowi asked related Ministries and agencies to wrap up the process of the divestment before the end of this year.

"The divestment process is a big step to return to the nation the majority ownership of our strategic natural resources," Jokowi said addressing the opening of a limited cabinet meeting on Acceleration of Divestment of PT Freeport Indonesia here.

Jokowi said the government will use the asset to improve the welfare of the people of Papua.

Minister of State Enterprises Rini Soemarno, Finance Minister Sri Mulyani, and Minister of Energy and Mineral Resources Ignasius Jonan witnessed the signing by CEO of Freeport McMoRan Richard Adkerson and Chief Executive of PT Inalum Budi Gunadi Sadikin of the Sales and Purchase Agreement at the ESDM Ministry in September.

The shares of PT Freeport Indonesia (PTFI) held by PT Inalum would increase from 9.36 percent to 51.23 percent and 10 percentage points of the stake held by PT Inalum would be given to the Papua regional administration.

Earlier this month, PT Inalum the holding company for state-owned mining companies, said it has raised enough fund to acquire a majority 51 percent stake in PT Freeport Indonesia.

Inalum said it hopes to wrap up the financial closure of the US$3.85 billion transaction for majority stake .

Inalum said it has raised US$4 billion (around Rp54.8 trillion) from the sales of government global bond to finance the deal.

The government has said the deal would be closed after Inalum made the payment.

"We have been ready for the final transaction with Freeport," head of Corporate Communication and Government Relations of PT Inalum, Rendy Witoelar has said.

Rendy said the bond fund would be used to finance the transaction and the rest to refinance debts.

The next steps are to settle documents related to mining business license (IUPK) with the energy and mineral resources Ministry and taxation and investment guarantee with the finance ministry. Reporting by Bayu Prasetyo T.B019/ (SYS/AS).

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