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Jakarta Post

Indonesia, Freeport still differ on valuation, other issues

  • News Desk

    The Jakarta Post

Jakarta   /   Fri, October 27, 2017   /   01:07 pm
Indonesia, Freeport still differ on valuation, other issues 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 Indonesian government and Freeport McMoran, a parent company of gold and copper miner PT Freeport Indonesia, have not reached an agreement on several issues, including the valuation of the company’s shares.

Freeport McMoran CEO Richard C. Adkerson said the valuation was only one of the several issues that had not been resolved in a negotiation with the government after the company agreed to divest 51 percent of its shares to Indonesia's entities.

Adkerson stressed the negotiation did not only focus on the valuation of PT Freeport Indonesia's shares, but also the divestment mechanism, including the government’s intention to buy the shares through state-owned enterprises.

Read also: Govt seeks close Freeport cooperation on Grasberg

The Freeport statement was seen at the expose of the company's third quarter performance received by on Thursday.

It also denies the remark made by Energy and Mineral Resources Minister Ignasius Jonan, saying that the government and Freeport had reached an agreement on valuation at US$8 billion.

Adkerson said the value of PT Freeport Indonesia’s shares should be calculated comprehensively, by considering various elements, including equity and debt. “The Freeport valuation is close to $13 billion,” he added.

The figure was lower than the Freeport valuation stated in the fourth quarter of 2015, which was $16 billion.

Adkerson still proposed that the divestment process would be implemented through an initial public offering (IPO), despite the government’s intention to buy Freeport’s shares through state-owned enterprises. (bbn)