Process of Freeport take-over wrapped up in April: Jonan

Reporter: SYSTEM 6th March 2018

Illustration. (ANTARA News/Lukisatrio)

Jakarta (ANTARA News) - Energy and Mineral Resources (ESDM) Minister
Ignasius Jonan said that the long brain racking negotiations with PT
Freeport Indonesia is expected to be wrapped up in April this year.

"The President wants that the process of the government taking over 51
percent of Freeport is to be completed before the end of April," Jonan said
here on Tuesday.

PT Freeport Indonesia (PT FI) has agreed to divest up to 51 percent of its
share to the Indonesian government. The decision is an implementation of
the Government Regulation (PP) No. 1 of 2017 on revision of PP No 23 of
2010 about coal and mineral mining activities.

PT Freeport Indonesia, a subsidiary of the U.S. mining giant McMoRan Copper
& Gold, has a big copper and gold mine in Papua.

Jokowi wants to see that the divestment of the 51 percent stake, which is
seen as a symbol of the state sovereignty over its natural wealth, became a
reality as soon as possible.

Jonan said the government would buy the participating interest of Rio
Tinto, and Freeport Mc Moran stake in PT Indocopper.

"We will buy at a price as reasonable as possible until the government has
a majority 51 percent stake in line with instruction of the President. We
will take over the 40 percent participating interest of Rio Tinto to be
converted into share and the rest in PT Freeport Mc Moran`s stake in PT
Indocopper Investama," the minister explained.

Jonan said the government did not want to put off the take-over until the
end of the contract of PT Freeport in 2021.

"If we wait until 2021, we have to pay at book price of all investment
Freeport already made instead of the value of the mine," he said

About the possibility of PT Freeport filing a protest against the
government with an international arbitration for not waiting until the end
of the contract, Director General of Mineral and Coal Bambang Gatot Ariyono
said in one of the chapters of its contract, PT Freeport has the right to
propose for contract extension, which is a point PT Freeport has to

"The contract says the government could not reject the extension proposal
without strong reason. As for the book calculation, we have no way of
saying for certain which parts are replaceable. What is regulated for
certain in the contract is that every goods changing ownership has to be
replaced at a certain period," Bambang said.

PT. Freeport Indonesia finally agreed with the divestment of the 51 percent
stake to the Indonesian government after long exhausting negotiations.
Negotiations, which became more intensive since April 2017 were on four
main points -- continuation of operation, share divestment, stability of
investment and construction of smelter.

Negotiations on the four points have been concluded in an inseparable
agreement package.

The results of the negotiations have been in line with the instruction of
President Jokowi, to put first and foremost the national interest, the
interest of the Papuan people, state sovereignty over natural resources and
maintaining conducive investment climate, Jonan said.


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