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JAKARTA: Indonesia will take a majority stake in one of the world's largest gold and copper mines, the government announced Thursday (July 12), while he is preparing to regain control of his natural resources. The company Inalum will acquire a 51% stake in the Grasberg mine under an agreement that will be signed later in the day, said President Joko Widodo.
Indonesia currently holds just under 10% of the mine. is owned and operated by a Freeport-McMoRan unit based in the United States.
Freeport is expected to continue operating the vast complex in the jungles of Papua province – and retain the remaining stake.
Widodo did not disclose the financial details "It's a leap forward," he told reporters after talks "very difficult and intense". "It's a done deal, we just need to sign it."
The agreement means more tax revenues and royalties for the government, he added.
The announcement comes after more than a year of negotiations on the future of Freeport operations in the nation of Southeast Asia.
Indonesian company and government dispute property The mine is a frequent friction point in Papua's struggle for Indonesia's independence and fueled resentment over how much the inhabitants benefit from the rich resources of the region.
Papua, on the western half of the island of New Guinea, has been the scene of a quivering insurrection of independence since its annexation by Jakarta in the late 1960s
The Anglo-Australian mining giant R io Tinto has entered into a joint venture agreement with Freeport for about 40 percent of Grasberg's production.
Rio Tinto has already stated that he would be willing to sell his stake in the complex, with previous reports setting a potential of about $ 3.5 billion.
Foreign companies have been ordered to comply with Widodo's new mining ownership rules – which seeks to be re-elected next year – to exercise greater control over Indonesian resources. Abundant resources, successive governments have failed to take advantage of its vast wealth, critics accuse the poorly designed and nationalistic policies that make the country an uncertain place to invest.
A series of regulatory changes introduced by the government in recent years has provoked nervousness among miners, with some foreign companies choosing to leave Indonesia rather than face such an unpredictable environment
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