- November 29, 2017
- Posted by: admin
- Category: Daily News
- Indonesia expects to conclude a deal by Feb 18 with Freeport-McMoRan Inc. that will see the U.S. miner shed its majority ownership of the giant Grasberg copper mine, according to the government.
- The basic structure of the deal may be in place by the end of 2017 and signed by Feb 18, State-Owned Enterprises Minister Rini Soemarno said in an interview in Jakarta on 28 Nov 17. The government was happy with the progress of negotiations with Freeport and its partner Rio Tinto Group, she said.
- Soemarno’s comments signal easing of tension between the two sides after Freeport in Sep 17 rebuffed government proposals on the valuation and method of divestment of the miner’s Indonesian unit within a framework agreement reached in Aug 17. Under the deal, state ownership will rise to 51% in exchange for a license that will allow Freeport to operate the project through 2041.
- Under Freeport’s pact with Indonesia, Grasberg will see an investment of as much as USD20bn through 2031 to further develop the mine, including the construction of a smelter.
- Freeport has maintained that the divestment process was contingent on, among other things, reaching an agreement on “fair value” for the stake. How that value would be determined, and other details — including timing — were left to be negotiated later. Freeport also needs to reach an agreement with Rio Tinto over its income stream asset that’s part of the joint venture agreement. The minister said she happy with the progress of those two-way talks.