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opper miner PT Freeport Indonesia hopes to conduct an initial public offering (IPO) to comply with the mandatory divestment regulation imposed by the government.

'€œA listing on the stock exchange is more transparent and accountable. However, it depends on the government because the current regulation does not mention IPOs,'€ the company'€™s spokesperson, Riza Pratama, said.

Freeport Indonesia, a subsidiary of US-based giant Freeport McMoRan Inc., is working to meet the government'€™s request to divest up to 30 percent of its shares to Indonesian shareholders. The share divestment is part of a deal between the company and government in a renegotiation of a contract of work (CoW), which is mandated by the 2009 Mining Law.

Freeport Indonesia is currently 90.64 percent owned by Freeport McMoran and 9.36 percent owned by the government. To meet the government'€™s request, the company must offer another 20.64 percent of its shares to Indonesian shareholders. According to the current timetable, as much as 10.64 percent should be offered in October. The government will have 90 days to give a response on the potential buyers, after the company formally files its offer.

According to existing regulation, share-purchase priority is given to the central government, provincial government and regency or municipality administration. State-owned enterprises and local administration enterprises are given second priority while last priority is given to private national entities.

'€œWe understand that the government is planning to revise a regulation. For us, what'€™s most important is a clear legal framework and mechanism,'€ Riza said.

He was referring to the government'€™s plan to revise a regulation on the maximum time to submit a request for a mining operation extension and divestment.

Energy and Mineral Resources Ministry secretary-general Teguh Pamudji has said that the revision will cover two main adjustments: a time limit change for a request for mining operation continuation by a maximum of 10 years before permit expiry from currently two years before expiry and the elimination of articles regarding divestment. Teguh revealed that the articles on divestment would be taken out from the government regulation and be formulated again in a ministerial regulation.

An inclusion of IPO as a mechanism in divestment of mining firms holding a CoW is likely as Energy and Mineral Resources Minister Sudirman Said has expressed his support.

'€œThe government will be open if there is a possibility [of divestment] to enter the market,'€ Sudirman told reporters last week.

There is no clear timeline on when the revision of the government regulation will be completed.

Freeport Indonesia currently operates Grasberg mining site, which is the largest gold mine and third-largest copper mine in the world. The company holds a CoW due to expire in 2021, from the government. As it desires to continue operating in Grasberg in Papua after 2021, the company is pushing hard to secure certainty that it will obtain a permit to continue operation after its contract expires.

Sudirman said last week that the government and Freeport Indonesia had reached an agreement that the company would continue its investment in the country while the authority continued working on regulations to support the company, including on the certainty over its operation after 2021.

'€œWe still need certainty on the continuation of our operations, although there is already a light pathway from the government,'€ Freeport Indonesia'€™s Riza said.