The Government of Indonesia (GoI) eventually controls 51 percent of PT Freeport Indonesia's shares. On Thursday, July 12, 2018, Finance Minister Sri Mulyani Indrawati has announced the signing of heads of agreement (HoA), between PT Indonesia Asahan Aluminum (Inalum) as a representative of GoI with Freeport and Rio Tinto.
According to Sri Mulyani, the agreement is a step forward and strategic to realize the agreement between the government and the company from Uncle Sam's country, which was previously announced on August 27, 2017.
"With the signing of the Heads of Agreement, it means that the divestment has been achieved, which is why the partnership between Freeport and Inalum and the government is able to increase the certainty in the cooperative and added value of Indonesia's extractive industry and can add prosperity to Indonesia and Papua," he said in a press conference after the signing in his office, Jakarta, Thursday, July 12, 2018.
Previously, the agreement between the government of Indonesia and Freeport was, among others, the legal basis governing the government and mining company in the form of a special mining operation and production license, no longer a contract of work. In addition, the divestment is 51 percent for the national interest of Indonesia.
Under the agreement, Freeport is asked to make a smelter in the country. The Government requests greater state revenue in aggregate or in total than received through the contract of work so far. The extension of the contract can be made up to two times ten years until 2041 if Freeport fulfills the obligations listed in IUPK-OP.
To support the divestment of shares, also signed an agreement between the corporation and the Provincial Government of Papua and the Government of Mimika Regency on January 12, 2018. "The Papua and Mimika governments together will own Freeport's share of 10 percent," said Sri Mulyani.
Meanwhile, to support the increase of state revenue as mandated by the Minerals and Coal Act, Sri Mulyani said the Ministry of Finance has tried to ensure the imposition of tariffs and state revenue in the form of IUPK can fulfill the mandate of the law. Including by ensuring the availability of regulations for all investors in order to provide stability payment of state revenue obligations.
"The issuance of the regulation is guided by the Minerba Act, which regulates the total state revenues greater than the acceptance through the contract of work, issuance through the issuance of IUPK-OP is done according to the law, which gives legal certainty for the holder of IUPK-OP as a business actor in the field of minerals , "said Sri Mulyani.
In his statement to reporters, Minister of State Owned Enterprises (SOE) Rini Soemarno said Inalum will issue US $ 3.85 billion. The money is to purchase Rio Tinto's participation or participation interest in PT Freeport Indonesia and 100 percent of Freeport-McMoran shares in PT Indocopper Investama.
According to Rini, with the purchase of Rio Tinto's participation interest and 100 percent Freeport-McMoran stake in Indocopper Investama, the state's shareholding becomes 51 percent. "The transaction value or funds issued by Inalum is US $ 3.85 billion," he said at the Finance Ministry Office on Thursday.
Rini said the structure and transactions have been locked in a signed head of agreement. Further discussion of the points that will be stated in the joint venture agreement. "For directors until the controls are being finalized in a joint venture agreement," he said.
Before reaching agreement, the negotiation process with Freeport took a long and winding road. According to President Joko Widodo (Jokowi), the process is difficult and takes 3.5 years. Negotiation efforts have been increasing in the last 1.5 years.
Jokowi said the agreement with Freeport was a big jump. "This is a leap that we expect to earn higher income, from taxes, royalties, dividends, from retributions, so that the value added mining commodities can be enjoyed by us all," he said after attending the 71st anniversary of the Cooperative Day at the Indonesia Convention Center , BSD City, Tangerang, Banten, on Thursday.
Jokowi claimed to have received a successful report of the agreement between PT Indonesia Asahan Aluminum (Inalum) and Freeport-McMoRan Inc. related to an increase in share ownership from 9.36 percent to 51 percent. Inalum in this context is the holding holding of SOEs mining industry. "Alhamdulillah," he said.
On June 25, 2018, Energy and Mineral Resources Minister Ignatius Jonan held a closed-door meeting with Freeport CEO Richard Adkerson at the Four Seasons Hotel in Washington. During the meeting, Jonan leaked all issues in negotiations with the Freeport side of a relatively agreed upon. The final point in the finalization phase is the 51 percent share divestment of Freeport Indonesia.(*)
According to Sri Mulyani, the agreement is a step forward and strategic to realize the agreement between the government and the company from Uncle Sam's country, which was previously announced on August 27, 2017.
"With the signing of the Heads of Agreement, it means that the divestment has been achieved, which is why the partnership between Freeport and Inalum and the government is able to increase the certainty in the cooperative and added value of Indonesia's extractive industry and can add prosperity to Indonesia and Papua," he said in a press conference after the signing in his office, Jakarta, Thursday, July 12, 2018.
Previously, the agreement between the government of Indonesia and Freeport was, among others, the legal basis governing the government and mining company in the form of a special mining operation and production license, no longer a contract of work. In addition, the divestment is 51 percent for the national interest of Indonesia.
Under the agreement, Freeport is asked to make a smelter in the country. The Government requests greater state revenue in aggregate or in total than received through the contract of work so far. The extension of the contract can be made up to two times ten years until 2041 if Freeport fulfills the obligations listed in IUPK-OP.
To support the divestment of shares, also signed an agreement between the corporation and the Provincial Government of Papua and the Government of Mimika Regency on January 12, 2018. "The Papua and Mimika governments together will own Freeport's share of 10 percent," said Sri Mulyani.
Meanwhile, to support the increase of state revenue as mandated by the Minerals and Coal Act, Sri Mulyani said the Ministry of Finance has tried to ensure the imposition of tariffs and state revenue in the form of IUPK can fulfill the mandate of the law. Including by ensuring the availability of regulations for all investors in order to provide stability payment of state revenue obligations.
"The issuance of the regulation is guided by the Minerba Act, which regulates the total state revenues greater than the acceptance through the contract of work, issuance through the issuance of IUPK-OP is done according to the law, which gives legal certainty for the holder of IUPK-OP as a business actor in the field of minerals , "said Sri Mulyani.
In his statement to reporters, Minister of State Owned Enterprises (SOE) Rini Soemarno said Inalum will issue US $ 3.85 billion. The money is to purchase Rio Tinto's participation or participation interest in PT Freeport Indonesia and 100 percent of Freeport-McMoran shares in PT Indocopper Investama.
According to Rini, with the purchase of Rio Tinto's participation interest and 100 percent Freeport-McMoran stake in Indocopper Investama, the state's shareholding becomes 51 percent. "The transaction value or funds issued by Inalum is US $ 3.85 billion," he said at the Finance Ministry Office on Thursday.
Rini said the structure and transactions have been locked in a signed head of agreement. Further discussion of the points that will be stated in the joint venture agreement. "For directors until the controls are being finalized in a joint venture agreement," he said.
Before reaching agreement, the negotiation process with Freeport took a long and winding road. According to President Joko Widodo (Jokowi), the process is difficult and takes 3.5 years. Negotiation efforts have been increasing in the last 1.5 years.
Jokowi said the agreement with Freeport was a big jump. "This is a leap that we expect to earn higher income, from taxes, royalties, dividends, from retributions, so that the value added mining commodities can be enjoyed by us all," he said after attending the 71st anniversary of the Cooperative Day at the Indonesia Convention Center , BSD City, Tangerang, Banten, on Thursday.
Jokowi claimed to have received a successful report of the agreement between PT Indonesia Asahan Aluminum (Inalum) and Freeport-McMoRan Inc. related to an increase in share ownership from 9.36 percent to 51 percent. Inalum in this context is the holding holding of SOEs mining industry. "Alhamdulillah," he said.
On June 25, 2018, Energy and Mineral Resources Minister Ignatius Jonan held a closed-door meeting with Freeport CEO Richard Adkerson at the Four Seasons Hotel in Washington. During the meeting, Jonan leaked all issues in negotiations with the Freeport side of a relatively agreed upon. The final point in the finalization phase is the 51 percent share divestment of Freeport Indonesia.(*)
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