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Jakarta Post

Indonesia extends Freeport’s divestment deadline

  • Prima Wirayani and Viriya P. Singgih

    The Jakarta Post

Jakarta   /   Thu, October 12, 2017   /   11:28 am
Indonesia extends Freeport’s divestment deadline A worker monitors the mineral flotation process to produce copper, gold and silver concentrates at one of Freeport Indonesia's facilities in Papua. (Kompas/B. Josie Susilo Hardianto)

The government has extended the deadline for United States-based mining giant Freeport-McMoRan (FCX) to meet its divestment obligation to the first quarter of 2019 — three months longer than the previous time limit — following a longer-than-expected negotiation between both parties.

The current government has been involved in intense negotiations for months with FCX over the future operations of the latter’s local unit PT Freeport Indonesia (PTFI).

In return for PTFI’s contract extension, the government is demanding that FCX, among other things, divest 51 percent of its shares in PTFI to Indonesian entities. At present, FCX controls 90.64 percent of PTFI, while 9.36 percent is owned by the government.

Read also: Shaky deal with Freeport

“The divestment process should be completed by the first quarter of 2019,” State-Owned Enterprises Minister Rini Soemarno said in Jakarta on Thursday, contradicting her previous statement that the designated deadline was at the end of next year.

Rini said there should be some flexibility for both parties to conclude the whole divestment process. “We’re still trying to make it happen by the end of 2018, but just in case, if we miss the deadline, it has to be completed by March 2019 at the latest,” she said.

Energy and Mineral Resources Minister Ignasius Jonan previously decided to give a three-month extension for PTFI’s temporary special mining license (IUPK) until Jan. 10, 2018, to give extra time for negotiations between FCX and the government to settle their contractual dispute. (bbn)