JAKARTA (TheInsiderStories) - Minister for State Own Enterprises Rini Soemarno said the state owned enterprises (SOEs) are ready to buy shares of PT Freeport Indonesia, a subsidiary of copper and gold minder Freeport McMoRan Inc.
“If SOEs are given a mandate to acquire Freeport shares, we (SOEs) are ready to realize it. We (SOE Ministry) have conveyed this message since last year,” Minister Rini told The Insider Stories.
Currently, Freeport-McMoRanholds 90.64% shares of Freeport Indonesia and the remaining 9.36% is held by an Indonesian entity. Based on the contract of works (CoWs), Freeport
Based on Government Regulation No. 77, 2014, Freeport is required to divest 30% shares as the company planned to carry out underground mining. Freeport then was supposed to divest further 10.64% shares in 2015 and further 10% by 2019.
However, the recent Government Regulation (PP) No 1, 2017, has mandated Freeport to divest up to 51% shares to the government. This was one of major issues that are being contested by Freeport McMoRan. The company still insists that it was only obliged to divest up to 30% shares.
Last year, Freeport has offered the 10.64% shares to the Indonesian government for US$1.7 billion or Rp23.83 trillion, however, the talks collapsed as the government considered that the price was too expensive.
On Monday (Feb 20), Freeport McMoRan President Director Richard Adkerson said Freeport “cannot accept” the government’s decision to allow Freeport to export concentrates on condition that the company agrees to change its Contract of Works (CoW) changed into Special Mining Permit (IUPK).
Freeport said the company and the Indonesian government negotiated over the past six months to reach an investment agreement. Freeport maintains its position that exports would be allowed and the Contract would remain in effect prior to signing the investment agreement.
“However, the Government decrees now mandate that our Contract be terminated to obtain permission to export, which we cannot accept,” Freeport President and CEO Richard C. Adkerson said in a press conference on Monday.
The Ministry of Energy and Mineral Resources (ESDM) on Friday (Feb 17), has issued a recommendation for Export Permit to PT Freeport Indonesia (PTFI). The export recommendations was issued based on the application letter of Freeport Indonesia No.571/OPD/II/2017, dated Feb. 16, 2017.
The energy ministry grants approval to Freeport Indonesia to export 1,113,105 Wet Metric Tonnes (WMT) of copper concentrates as stated in the Approval Letter No. 352/30/DJB/2017, dated February 17, 2017. The granting of export permit is valid from Feb. 17, 2017 until Feb. 16, 2018.
On Wednesday (Feb 22), Director for Customs and Levy Heru Pambudi said so far it has yet to receive request from Freeport (SPE) to export copper concentrates. He said the dispute with the government could last until next six months, but it should have no impact on the government’s state budgert in term of revenues.
Last year, he said, Custom Office received Rp1.2 trillion from Freeport Indonesia and Rp1.253 trillion from Newmont Nusa Tenggara, now Amman Mineral Nusa Tenggara (AMNT). Therefore, the combined revenues from the two major copper and gold producer totaled Rp2.5 trillion. (*)