Once again, RI becomes the majority shareholder of Freeport Indonesia

JAKARTA, KOMPAS.com After Freeport Indonesia's decades of operations in Indonesia, the Indonesian government will have a majority stake in PT Freeport Indonesia (PTFI) through a 51% divestment process.

would benefit greatly from Freeport McMoran Incorporated's operations for the coming decades.

The major step towards majority ownership is marked by the signing of the Head of Agreement between PT Indonesia Asahan Alumunium or Inalum (Persero) with PTFI at the Ministry of Finance on Thursday (12/7/2018) .

The procession was led by the President Director Inalum Budi Gunadi Sadikin and Freeport McMoran Chairman Director Richard Adkerson

Read: Inalum and Freeport Sign an Agreement to Transfer Shares PTFI [19659002] Signature of a divestment agreement with the Minister of Finance Sri Mulyani Indrawati, the Minister of ESDM Ignasius Jonan Rini Soemarno, as well as the Minister of Environment and Forests, Siti Nurbaya. In this way, both parties agreed to transfer 51% of PTFI's capital to Indonesia. With regard to the takeover, the Indonesian side is represented by PT Inalum (Persero) as holding company of BUMN mining.

The signature of the chief of the agreement is not the end. There are still other stages, that in the near future Inalum must make a payment of 3.85 billion US dollars or about 55.44 billion Rp (exchange rate of 14.400 Rp for a US dollar).

Payments

Budi told reporters that the $ 3.85 billion fund will be used to buy Rio Tinto's participatory interest (PI) and 100% of Freeport's shares McMoran in PT Indocopper Investama. Rio Tinto PI at PTFI is 40%, while Indocopper shares are 9.36%.

From the 40% of Rio Tinto 's IP, it will be converted into shares that will then be increased by Indocopper for Inalum to gain 51%. The buying and selling process will soon be implemented, with the target given by SOE Minister Rini Soemarno at the end of July 2018.

"I ask Mr. Budi at the end of the month (c & 39). is done), but Pak Budi asked for a little more help. ] Read: Disinvestment of Freeport shares, Inalum supported by 11 banks

Budi undertakes a buying and selling process to annex 51% of the PTFI shares no later than 2 months. To pay $ 3.85 billion, Inalum will get a loan from a syndicate of 11 unnamed banks.

Rini confirmed that the structure of the transaction and the sale price of the shares were blocked so that there will be no change. The next step is the joint venture agreement to confirm the share in PTFI, which is 51 percent in Indonesia and 49 percent freeport.

"After the final joint venture agreement we signed and paid immediately After signing and remunerating, the Minister of EMR and the Minister of Finance will issue IUPK (Special Mining Business License) and other , investment stabilization that has become a part of the IUPK, "Rini said.

Recall that in August 2017, the government and Freeport entered into a number of agreements to negotiate a divestment of 51%.

The agreement included the change of the status of PTFI from the employment contract to IUPK, the extension of IUPK to 2 times 10 years, build smelters and refining and processing facilities, as well as the stabilization of state revenues.

The specific points of stabilization of state revenue, later on all over Indonesia will receive more than previous PTFI with KK status yet. According to Sri Mulyani, the state will collect revenue in the form of income tax (PPh), property and property tax (PBB), and value-added tax (VAT). On the financial statements of 2017, PT Freeport Indonesia recorded a turnover of 4.44 billion US dollars against 3.29 billion US dollars in 2016. PTFI also generated a net profit of 1.28 billion US $ 579 million previously.

PT Freeport Indonesia also has proven reserves and estimated reserves for copper of 38.8 billion pounds, gold of 33.9 million troy ounces and silver of , 1 million troy ounces. [En19659003] While Inalum in 2017 recorded revenues of $ 3.5 billion with a consolidated net profit of 508 million US dollars.

Inalum also has nickel resources and reserves of 739 million tons, 613 million tons of bauxite 1.1 million tons, 11.5 billion tons of coal, 1.6 million troy ounces of gold and 16.2 million troy ounces of money.