JAKARTA EYES CONTROL OF FREEPORT UNIT
Aluminium producer will be turned into holding company to acquire majority stake
THE dispute engulfing the world’s secondbiggest copper mine deepened as Indonesia’s government said it planned to take a majority stake in the local unit of owner Freeport-McMoRan Inc within two years while workers at the pit threatened to go on strike.
The state enterprises ministry had cleared a government-run company to buy a majority stake in PT Freeport Indonesia, the local unit that runs the massive Grasberg mine in Papua province, according to Fajar Harry Sampurno, the deputy minister for mining, media and strategic industries.
Freeport-McMoran would have to divest its share to a stateowned entity under a new contract that the Phoenix-based miner had yet to sign.
“We’re ready,” said Fajar Harry at a press conference, here, on Wednesday.
Aluminium producer PT Indonesia Asahan Aluminium would be turned into a holding company to buy the stake, he said.
The preparations for stateownership suggest Jakarta is refusing to budge in a dispute that’s curtailed mining at Grasberg and prompted Freeport to lay off thousands of workers.
Under new rules announced in January, the government said companies that want to export semi-processed metals, including copper concentrate, must convert their contract of work to a special mining licence, build smelters and add local investors.
Freeport has refused to do so until it gets guarantees protecting its investment.
The rules stipulate foreign miners must begin selling shares to local entities five years after starting production and must reach 51 per cent local ownership by the 10th year.
The firm has been mining in the country for more than a decade. Bloomberg