Jakarta, Indonesia Sentinel — Indonesia’s sovereign wealth agency, Danantara said that Freeport McMoRan has agreed to divest 12% of its shares to Indonesia, boosting the country’s ownership of PT Freeport Indonesia (PTFI) to 63%.
“They have agreed to release 12%,” CEO of Danantara Rosan Roeslani told reporters at the Investment Ministry in Jakarta, Tuesday (September 30) as reported by Antara.
Rosan said Freeport had agreed to the divestment following negotiations with company executives, Freeport-McMoRan Chairman Richard Adkerson and CEO Kathleen Quirk during his recent trip to the United States.
He said the agreement exceeded Indonesia’s original target of 10% and will be granted free of charge. “They have agreed to provide 12% of shares without any cost,” he said.
As part of the deal, Freeport also committed to building two universities and two hospitals in Papua, where the company operates one of the world’s largest copper and gold mines.
“Two hospitals and two universities will be built there, in Papua,” Roeslani noted.
The divestment is a key requirement for Freeport to extend its special mining license, which is set to expire in 2041. Under Government Regulation No. 25/2024, mining firms seeking a license extension must transfer at least 10% of their shares to a state-owned entity.
With the additional stake, Indonesia’s mining holding company, PT Mineral Industri Indonesia (MIND ID), will see its ownership in PTFI rise from 51% to 63% by 2041.
Read Also:
Earlier, Mining industry experts said the move would provide Indonesia with greater benefits from Freeport’s vast remaining ore reserves, but warned of significant costs.
Citing from Bloomberg Technoz, Chairman of the Mining Engineering Chapter of the Indonesian Engineers Association (PII), Rizal Kasli states that while the expanded ownership would deliver more value, the government would also shoulder a larger share of future development costs.
“With 63% ownership, the government through MIND ID must allocate additional funding in line with its stake to finance further development of the reserves,” Rizal said (September 24) as reported by Bloomberg Technoz.
He added that the scale of investment required is likely to be large and technologically demanding. Therfore, Rizal stressed that Indonesia should continue partnering with Freeport in developing the mines rather than bearing the financial and technical burden alone.
(Raidi/Agung)
