Government picks Inalum to buy Freeport’s shares

FREEPORT - State-Owned Enterprises Minister Rini Soemarno said on Wednesday that the government selected state-owned aluminum firm PT Indonesia Asahan Alumnium (Inalum) to acquire 51 percent of shares in gold and copper miner PT Freeport Indonesia.

She also said the company did not need to form a holding to buy the shares after United States-based Freeport McMoRan Inc., a parent company of Freeport Indonesia, agreed to divest 51 percent of the company's shares in exchange for a contract extension for its mining site in Papua to 2041.

Previously, several state-owned mining companies -- PT Indonesia Asahan Alumunium (Inalum), PT Aneka Tambang (Antam), PT Bukit Asam, and PT Timah – were asked to establish a holding company to jointly buy the shares.

“No, we do not need to wait for the establishment of a holding because the one that will buy [the shares] is Inalum,” Rini said as reported by kompas.com.

The government will monitor the valuation of the Freeport assets, she said, adding that the divestment process could be finished next year. “Our financial advisers and lawyers were preparing the proper time and the procedure of valuation,” Rini said.

Freeport McMoRan CEO Richard Adkerson announced the divestment agreement on Aug. 29 after meeting with Finance Minister Sri Mulyani Indrawati and Energy and Mineral Resources Minister Ignasius Jonan.

Freeport also agreed to convert its contract of work (CoW) into a special mining permit (IUPK), build a smelter within the next five years and increase its contribution to state revenue from its Grasberg mine in Papua.