Inalum, Antam encouraged to buy Freeport shares

JAKARTA. State-Owned Enterprises (BUMN) Minister Rini Soemarno is set to encourage state-owned aluminum maker PT Indonesia Asahan Aluminium (Inalum) and state-owned diversified miner PT Aneka Tambang (Antam) to purchase shares as part of PT Freeport Indonesia's upcoming share divestment.

“The ministry is currently conducting detailed calculations and analysis to see how Inalum should join in Freeport’s share divestment," said Rini in Jakarta on Monday as quoted by Antara news agency.

According to Rini, the BUMNs were financially ready to increase the government's shares in Freeport thanks to the full support of state-owned banks such as Bank Mandiri, BRI and BNI.

"We feel that Inalum should join in since it doesn’t yet own any mines and thus can hopefully serve as an effective Freeport shareholder," said Rini. She added that the banks would certainly be eager to support [the plan] since Inalum had very strong finances and Freeport was of great strategic value.

"Other than domestic companies, international financial institutions will definitely compete to help fund the purchase as well," said Rini.

Antam, which currently focuses on a smelter-grade alumina refinery in Mempawah, West Kalimantan, is considered a strong and effective partner for potentially assisting Inalum to take purchase a slice of Freeport.

Rini added that the ministry was currently completing a study on the share divestment.

"[We expect] the study will be completed before the end of October. We will soon submit a proposal to the Energy and Mineral Resources Ministry," said Rini.

Under PP No. 77/2014 on mineral and coal mining business activity, Freeport must divest 10.64 percent of its shares to the government by Oct. 14, to bring Indonesian ownership of the company up to 20 percent. After accepting an offer, the government has 90 days to negotiate with Freeport. (ags/kes)