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Inalum, Antam to get priority in Freeport share divestment
Dig deeper: Energy and Mineral Resources Minister Sudirman Said says that two state-owned companies, PT Inalum and PT Aneka Tambang, are ready to purchase 10
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Dig deeper: Energy and Mineral Resources Minister Sudirman Said says that two state-owned companies, PT Inalum and PT Aneka Tambang, are ready to purchase 10.64 percent of the shares of gold and copper miner PT Freeport Indonesia.(Kompas/Iwan Santosa) (Kompas/Iwan Santosa)
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span class="inline inline-center">Dig deeper: Energy and Mineral Resources Minister Sudirman Said says that two state-owned companies, PT Inalum and PT Aneka Tambang, are ready to purchase 10.64 percent of the shares of gold and copper miner PT Freeport Indonesia.(Kompas/Iwan Santosa)
Energy and Mineral Resources Minister Sudirman Said has indicated that two state-owned companies (SOEs), namely PT Inalum and PT Aneka Tambang (Antam), would get priority in stakes of gold and copper miner PT Freeport Indonesia (PTFI) in the latter's share divestment process.
Under Government Regulation No.77/2014 on mineral and coal mining businesses, Freeport must begin divesting 10.64 percent of its shares to Indonesian entities this year.
According to the regulation, the central government, provincial administrations and regency and municipality administrations will be first in line to buy the shares. Second priority is given to state-owned enterprises and provincial administration-owned enterprises (BUMD). Thirdly, the private sector may buy any remaining shares.
Sudirman said that the government was not yet able to purchase 10.64 percent of Freeport's shares due to the country's poor fiscal conditions.
'Fiscal conditions are currently not good, so the company's share purchasing will use corporate money. We will asses whether their balance sheets have the capacity [to purchase the shares]. Hopefully, they have the capacity and will be able to get financing,' Sudirman said at the House of Representatives compound in Jakarta on Tuesday.
He further explained that until now, the subsidiary of US-based mining giant Freeport-McMoRan Inc. had not submitted their share offering to the government. Freeport claimed that it would submit its share offering only after the government could make the divestment mechanism clear.
"The state-owned enterprises minister [Rini Soemarno] has sent me a letter, conveying the readiness of the two SOEs for the divestment process. We still have time to formulate the divestment mechanism," Sudirman said.
Earlier, a member of the House's Commission VII overseeing energy, Hadi Purnomo, said that the government should buy Freeport's shares given the huge potential of the company's mining activities.
"The idea is that we have to take control of our state assets by any means," the lawmaker said.
The Gerindra Party politician disagreed with Freeport's divestment mechanism being conducted through an initial public offering (IPO).
Under PP 77, Freeport must divest 10.64 percent of its shares to the government by Oct. 14, increasing Indonesian share ownership in the company to 20 percent. After accepting an offer, the government has 90 days to negotiate with Freeport. The divestment is one of the 17 points to be agreed upon in the company's mining contract extension. (ebf)
