The Jakarta Post
The Indonesian Chamber of Commerce and Industry (Kadin) has advised the government not to bow down to the wishes of the United States’ Freeport McMoRan, the parent company of PT Freeport Indonesia, which had rejected the government’s proposal on its divestment scheme.
Kadin deputy chairman for eastern Indonesia H. Andi Rukman Karumpa said in Jakarta on Monday that the government needed to defend its position on the divestment of 51 percent shares of PT Freeport Indonesia as required by Indonesian law.
“I hope the government will not feel pressured. It needs to defend the scheme,” he said as reported by tribunnews.com.Read also: Freeport, govt butt heads over divestment details
Andi’s statement was made in response to a letter sent by Freeport McMoRan Inc. CEO Richard C. Adkerson to the Finance Ministry’s secretary general, a copy of which was also sent to Finance Minister Sri Mulyani.
In his letter dated Sept. 28, Adkerson said his company, which agreed in late August to divest 51 percent of its shares, could not accept a number of issues related to the valuation, timing and structure of the divestment.
With regards to valuation, for example, the government’s position is to buy the shares based on the market price, while Freeport wants to take into consideration the reserve of its gold and copper mining site in Papua in calculating the share price.
He said the government was in a strong position.
“The mineral reserve is owned by the state. The company only rents. It is unlikely that we have to buy our owned [mining reserves],” said Andi, citing Article 33, paragraph 3 of the Constitution. (bbn)