Minister Shows Confidence Govt Will Secure 51% Stake in Freeport

TEMPO.CO, Jakarta - The Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said he is optimistic that the government would secure 51 percent stake in Freeport Indonesia through divestment.

Luhut said that the government will find the best solution to resolve a contract dispute with the local unit of U.S.-based mining giant Freeport-McMoRan Inc.

“I believe we will continue to seek the best solutions, there are parameters of the share ownership, the Indonesian government may get 51 percent,” he said in a written statement on Wednesday.

Luhut claimed that the government has the financial capability to acquire the shares, adding that many have promised financial backing.

Aside from share ownership, Minister Luhut noted that the government will adopt pro-people policies, among others, by developing smelters.

The government issued the Government Regulation No. 1/2017 on the Fourth Amendment to the Government Regulation No. 23/2010 on Mineral and Coal Mining Practices, which allows export of mineral concentrate in certain conditions, namely holders of Contract of Work (CoW) have to switch over to a mining permit (IUP) and a special mining permit (IUPK), the commitment to build smelters within 5 years, and mandatory divestment of up to 51 percent stake.

The government has advised PT Freeport Indonesia to switch over its CoW to IUPK in order to resume operation in Indonesia.

However, Freeport has refused to give up its legal rights in the CoW signed in 1991.

Freeport has so far stopped production activities and laid off its employees.

BISNIS.COM