Freeport divestment now at final stage: inalum
President Director of Inalum, Budi Gunadi Sadikin, in his capacity as the leader the holding mining company, said that the divestment of Freeport Indonesia is now at the final stage.
“Yes, we only handle divestment, and the divestment process has reached the final stage,” Sadikin told reporters in Bogor on Saturday.
He did not explain how the process reached the final stage. He only conveyed an implicit answer.
The Inalum president director neither explained the next steps of negotiation nor the process of the final negotiations.
Earlier, Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan mentioned that the 51 percent divestment of PT Freeport Indonesia has been targeted to be completed by April 2018, based on President Joko Widodo`s target.
“The president`s directive is that, if possible, PT Freeport Indonesia divestment should be completed before the end of April,” Jonan remarked.
The divestment of 51 percent of PT Freeport Indonesia shares is carried out under the Government Regulation No. 1 of 2017 concerning the Fourth Amendment of Government Regulation Number 23 Year 2010, regarding the Implementation of Mineral and Coal Mining Business Activities.
Regarding the mechanism of share divestment purchase, Jonan explained that the government will buy shares from Rio Tinto`s participating interest and the rest from PT Freeport Mc Moran shares in PT Indocopper.
“We will buy them at a fair price until the government share portion reaches 51 percent according to the direction of Widodo. We will take over 40 percent of the participating interest of Rio Tinto to be converted into shares, and the rest will be taken from the shares owned by PT Freeport Mc Moran in PT Indocopper Investama,” Jonan revealed.
Jonan also explained the reason why the government would not wait for ownership until PT Freeport Indonesia ends its contract period at the end of 2021.
“If we wait until the year 2021 to take over, we must pay a minimum book value for all Freeport investments that have been done there and not the value of the mine,” he pointed out.