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Jakarta Post
The Jakarta Post
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Freeport’s divestment deal worth $3.8 billion 

  • Stefanno Reinard Sulaiman
    Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta | Fri, July 13, 2018 | 09:26 am
Freeport’s divestment deal worth $3.8 billion  State-owned mining holding company PT Indonesia Asahan Aluminium (Inalum) president director Budi Gunadi (third right), and Freeport McMoran CEO Richard Adkerson (third left) shake hands after signing an agreement on the divestment of PT Freeport Indonesia shares in Jakarta on July 12, witnessed by Energy and Mineral Resources Minister Ignasius Jonan (left), Finance Minister Sri Mulyani (second left), Environment and Forestry Minister Siti Nurbaya Bakar (right) and State-Owned Enterprises Minister Rini Soemarno. (Antara/Wahyu Putro)

The government inked on Thursday a heads of agreement (HoA) on a deal with United States mining giant Freeport McMoran Inc (FCX) on the divestment of PT. Freeport Indonesia (PTFI), which operates the world’s largest gold mine called Grasberg. 

Through the HoA, PT Indonesia Asahan Aluminium (Inalum), Indonesia’s representative in this deal, will pay out US$3.85 billion to finalize the divestment no later than the end of 2018. 

“With the signing of this agreement, the cooperation between FCX and Inalum is expected to improve and bring value-added benefits to the industry,” Finance Minister Sri Mulyani Indrawati said in a press conference on Thursday afternoon. 

The deal is part of last year’s agreement between the government and FCX on four requirements: increasing Indonesia’s ownership in PTFI from 9.36 percent to 51 percent, developing a smelter within five years, stable investments and changing PTGI’s contract of work (CoW) into a special mining permit (IUPK). 

Energy and Mineral Resources Minister Ignasius Jonan said the HoA will pave the way for the execution of these requirements. 

“Every aspect of the agreement, from the divestment, change in contracts and the commitment to developing smelter, can be finalized as of today,” he said. 

Environment and Forestry Minister Siti Nurbaya Bakar and State-Owned Enterprises (SOEs) Minister Rini Soemarno also attended the meeting, along with FCX CEO Richard Adkerson and PTFI president director Tony Wenas. (bbn)

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