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Jakarta Post

No deal yet on Freeport’s 51% share divestment: Luhut

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, August 22, 2017   /   10:27 am
No deal yet on Freeport’s 51% share divestment: Luhut Underground activities of PT Freeport Indonesia in Tembagapura, Papua, in July, 2016. (Kompas Print/File)

Last week, Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan said the government had agreed to extend PT Freeport Indonesia’s contract to 2041 in exchange for the company’s agreement to divest 51 percent of its shares and to construct smelter, but on Monday he made different statement.  

"[The negotiation] is still ongoing, but an agreement is on the way. Our requirements […] cannot disputed,” he said.

"Our stance is fixed. We will never back down. The current contract will end in 2021, [but after that] we will not just do what they tell us to."

Read also: Contract to be extended to 2041 as Freeport agrees to divest 51% shares

Previously, Energy and Mineral Resources Minister Ignasius Jonan said the negotiation with Freeport Indonesia had entered its final phase, discussing taxation and regional levies.

Luhut added that if the miner agreed to release a majority of its shares, the government would not hesitate to grant the extension of its operating license to 2041.

After Freeport agreed to divest its shares, the government would discuss the divestment mechanism, such as holding an initial public offering (IPO), Luhut said.

"To be as fair as possible, we’ll let the market do the valuation,” he said, adding that the central government will be given the first option to buy Freeport’s shares, followed by regional administrations and then the private sector. (dis/bbn)