Indonesia: Minister Promises to Give 5-10 Percent Stake in Freeport to Papua
TEMPO.CO, Jakarta – The Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said that he will give 5-10 percent stake in PT Freeport Indonesia to Papua local governments amid negotiations to divest the company’s 51 percent stake.
Luhut said that divestment of Freeport’s stake is expected to be completed by 2019. According to him, the government will raise more revenue through a special permit (IUPK) compared to the existing contract of work (CoW).
Moreover, Luhut said, the Indonesian government and Freeport will negotiate further about market valuation but not the reserves. “There will be a study and a formula,” he said.
He also confirmed that the Freeport’s 51% share divestment plan continues. Indonesia will own the shares by 2019. The government’s share ownership in the company currently stands at 9 percent.
Freeport values the shares at US$15.9 billion (Rp200 trillion). It means that the government must prepare Rp105 trillion to purchase 51 percent stake in Freeport.
The government is planning to establish a holding company for mining SOEs to acquire Freeport’s shares. The holding company will comprise of PT Inalum, PT Bukit Asam, PT Timah, and PT Aneka Tambang.