President Joko Widodo’s administration issued on Nov. 14 Government Regulation (PP) No. 47/2017 on additional state capital injection for Inalum, through which the government has transferred all of its Series B shares in three state mining firms, namely PT Aneka Tambang (Antam), PT Timah and PT Bukit Asam, to the aluminum producer.

As a result, the three miners will change their status to subsidiaries of Inalum, from liability firms owned by the state.

The three miners, which had a combined market capitalization of Rp 48.2 trillion (US$3.56 billion) as of Friday, are slated to ask for permission for the shares transfer in extraordinary general shareholders meetings on Nov. 29 in Jakarta. If things go well, the mining holding firm is good to go.

“The main goal of this holding firm is to join the Fortune Global 500 List before 2025 and the acquisition of PTFI will be a big trigger to meet that target,” Inalum finance director Oggy Achmad Kosasih told The Jakarta Post recently.

The Fortune Global 500 List is an annual ranking of the world’s largest 500 companies by revenue released by Fortune magazine. State-owned energy giant Pertamina is the only Indonesian firm featured on the 2017 list, ranking 289th with revenue of $36.48 billion in 2016.

The government has projected Inalum as a state mining holding company to take over 51 percent of PTFI’s shares by the first quarter of 2019 at the latest.

At present, American mining giant Freeport-McMoRan (FCX) owns 90.64 percent of PTFI. Meanwhile, another 9.36 percent has been transferred to Inalum from the Indonesian government through the issuance of PP No. 47/2017.

The government demands FCX divest its majority stake in PTFI, among other things, in return for the extension of PTFI’s operating permit in the country, set to expire in 2021. The miner currently operates the Grasberg mine in Papua, known as the world’s largest gold and second-largest copper mine.

However, the two parties have yet to come to terms on the value of PTFI’s shares.

The government previously calculated the remaining 41.64 percent shares to be taken over from PTFI to be worth $2.46 billion, while FCX’s estimation is set at $6.6 billion because it takes into account Grasberg’s reserves and operation until 2041.

Even so, Inalum corporate secretary Ricky Gunawan was optimistic the company would have the financial capacity to acquire PTFI after its transformation into a holding firm.

“We will be ready, as we will have a larger asset base through this consolidation,” he said.

The establishment of the mining holding company will jack up Inalum’s assets to more than $6.6 billion from only around $2 billion at present.

The combined revenues of Antam, Timah and Bukit Asam stood at $1.98 billion in the first nine months of 2017; while Inalum’s top line reached $360 million as of October.

Furthermore, the total net profit of the three miners was $194.6 million between January and September, while Inalum’s bottom line was $75 million by the end of October.

Fajar Harry Sampurno, the State-Owned Enterprise (SOE) Ministry’s undersecretary for mining, strategic industries and media affairs, said his side had also asked the Workers Social Security Agency (BPJS Ketenagakerjaan) to help finance the acquisition of PTFI. However, the ministry cannot force the institution to participate as it is not an SOE.

As of August, BPJS Ketenagakerjaan had managed employee social security funds totaling Rp 293.54 trillion from a total of 24.1 million members.

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