Photo by The Insider Stories

JAKARTA (TheInsiderStories) – Minister of Energy and Mineral Resources Ignasius Jonan has mentioned the value of the 51 percent stake to be divested by PT Freeport Indonesia (PTFI) to be worth around US$4 billion. He stated that U.S mining and copper giant Freeport McMoran Inc. (FCX) is valued at $20.74 billion on the New York Stock Exchange, and PTFI is about 40 percent of the total value.

Freeport McMoRan has agreed to divest up to 51 percent of its shares to Indonesia, in exchange for an extension of its contract, which will expire in 2021. Last Friday (6/10), Jonan received Freeport-McMoRan CEO Richard Adkerson in Jakarta, to follow up on the President’s directive to expedite the process of continuing PTFI operations in Indonesia to a mutually agreeable conclusion.

As is widely known, the negotiations began with four main points of operability, stock divestment, investment stability and smelter development. These four main points are discussed in one package, resulting in a complete agreement.

Earlier, in a working visit to review the infrastructure of thermal-coal power plant Java in Banten (5/10), President Joko Widodo revealed that the negotiations are now almost completed.

“Once again we are still in the process of meeting our team, Minister of Energy and Mineral Resources, Minister of State-Owned Enterprises, Minister of Finance Menko Kemaritiman in a team; the fact is that it has been a tough negotiation, almost final,” said President.

Widodo assures the public that the negotiations, running for three years, will soon find a win-win solution. He instructed the results of negotiations will have to ensure the national interest, the interests of the people of Papua, the sovereignty of the state in natural resources while maintaining a conducive investment climate.

Monday night (9/10), the Minister was also present at a meeting with an an internal government team. He said the decision to extend the operating license of Freeport is to be granted only if the conditions set by Indonesia have been accepted, including the divestment of up to 51 percent of the Freeport shares and the commitment to building a smelter – and that the state revenues must be greater.

Earlier Jonan said the government has reached an agreement with Freeport-McMoRan to allow the U.S miner to apply for a permit to keep operating its giant Grasberg copper and gold mine in the country. He asserted that until now nothing has changed regarding the outcome of negotiations between the Government of Indonesia and Freeport.

 

“The meeting to this day changed nothing; the big deal was reached on August 27, with the Government approving a maximum extension of 2×10 years with the terms of three,” explained Jonan when delivering the results of negotiations with PTFI to Commission VII of the House of Representatives on Monday.

Related to the letter submitted by Freeport to the Minister of Finance, Jonan admitted that President Widodo instructed the Minister of Finance, together with the Minister of State-Owned Enterprises, to discuss in detail the divestment of shares.

“The President commissioned the details of the share divestment discussed with the Ministry of Finance and the Ministry of State Owned Enterprises representing the state. We are supportive of the divestment of shares in a proper value,” said Jonan.

Writing by Linda Silaen, Email: linda.silaen@theinsiderstories.com

 

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