Inalum Smelting Plant : (Photo Credit : SOE Ministry)

JAKARTA (TheInsiderStories) – Indonesian aluminum producer PT Indonesia Asahan Aluminium (Inalum) now owns 9.36 percent of the shares of PT Freeport Indonesia, after the government officially signed the transfer of government ownership in Freeport Indonesia document, as the mining holding company, on Monday (27/11).

Minister of State Owned Enterprises (SOEs) Rini Soemarno has also signed an agreement to transfer the government’s shares in PT Aneka Tambang (65 per cent), PT Bukit Asam Tbk (65.02 per cent), and PT Timah Tbk (65 per cent) to Inalum, as part of a strategic plan to establish a state-owned mining holding enterprise.

The next step: these companies are scheduled to obtain approval from shareholders to amend the Articles of Association in relation to the change of ownership from the Indonesian government to Inalum, whose shares are 100 per cent owned by the State.

“The process is close to a conclusion,” said Soemarno, following the signing ceremony.

Despite its changing of status, the three holding members are still treated equally as SOEs for strategic matters. Thus, the government retains control over all three, either directly through the so-called Dwiwarna shares or indirectly through PT Inalum (Persero), as stipulated in Government Regulation (PP) Number 72 of 2016.

“All strategic moves undertaken by the holding member companies remain under the control of the State, equal to before becoming a holding member, including matters related to Parliament if it were to be privatized. The change of name with the loss of ‘Persero’ also does not imply any consequences of a loss of State control or authority to serve the public,” she said further.

The government plans to use Inalum as a vehicle to take over the remaining 41.64 per cent of the shares of PT Freeport Indonesia, one of the world’s largest copper and gold mines, in Papua Province, from US-based Freeport McMoran.

Freeport McMoran currently owns 81.28 per cent of local subsidiary Freeport Indonesia, but following intense negotiations, it has finally agreed in principle to shed up to a 51 per cent stake to local entities. The Indonesian government currently owns a 9.36 per cent stake in the Indonesian unit; its Energy and Mineral Resources Ministry is still in talks with Freeport over the divestment of the remaining shares.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com

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