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Papua to discuss plans to buy Freeport shares
A car drives along a road leading to PT Freeport Indonesia's gold and copper mine in Papua
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A car drives along a road leading to PT Freeport Indonesia's gold and copper mine in Papua. (Kompas/Iwan Santosa) (Kompas/Iwan Santosa)
A car drives along a road leading to PT Freeport Indonesia's gold and copper mine in Papua. (Kompas/Iwan Santosa)
The Papua administration has expressed its intention to purchase shares of giant gold and copper miner PT Freeport Indonesia.
According to Papua Development Planning Board (Bappeda) head Muhammad Musaad, under Government Regulation No. 77/2014 on mineral and coal-mining business activity, the provincial administration had the opportunity to own shares in Freeport.
"Hopefully we can discuss [the funding sources] soon; there are many mechanisms that we can use," Musaad told thejakartapost.com in Jakarta recently.
Separately, Democratic Party lawmaker Willem Wandik urged the provincial administration to purchase 10.64 percent of Freeport's share divestment to reduce economic centralization and boost economic activity in the region.
According to Willem, the central government's monopoly over Freeport negotiations suggested the matter only concerned the interests of the central government.
Currently, the company is 90.64 percent owned by US-based giant Freeport McMoRan Freeport and 9.36 percent by the central government.
With the expiration of Freeport's contract in 2021, Willem said, the central government should provide the opportunity for Papua to participate in determining the clauses of the new contract.
"The Papua administration will be able to obtain a share dividend of raw mineral production and refining results based on the size composition of the shares. This means any net profit of Freeport will be given to the Papua administration at 10.64 percent," said Willem.
Willem later recommended that the Papua administration immediately prepare a proposal and make a bid through the Energy and Mineral Resources Ministry.
"The Papua administration can set up a financing scheme of capital expenditure to purchase the shares," he said.
The scheme, said Willem, could include the mechanism of budget financing, debt financing or a debt agreement with Freeport McMoRan, or setting up a consortium of local administrations and private companies.
Separately, Freeport Indonesia vice president Napoleon Sawai responded positively to the Papua administration's intention to purchase the company's shares.
"[The plan] is a good thing," said Napoleon. (kes)
