Jakarta – State-Owned Enterprises Minister Rini Soemarno has said the government does not expect big revenue from gold and copper miner PT Freeport Indonesia (PTFI) in the next three years, following a US$3.85 billion divestment deal.
"In the next three years, the company will spend a lot of money. Therefore, the dividends [distributed to shareholders] will drop," Rini said in Jakarta on Wednesday as reported by kompas.com.
Under a deal with Freeport McMoRan (FCX) signed in December 2018, state mining holding company PT Indonesia Asahan Aluminium (Inalum), a representative of the government, managed to increase its shares in PTFI from 9.36 percent to 51.23 percent.
She said PTFI's profitability was set to drop in 2019, 2020 and 2021 because the company needed large amounts of funds for investments in at least two projects – the construction of a smelter and construction for an underground mining facility.
"We believe in the importance of smelter construction so that the concentrates could be processed domestically," Rini said, adding that the underground mining facility should be constructed because there would no longer be open-pit mining at the mining site in Mimika, Papua.
The minister, however, said that, in 2022, Indonesia would earn significant revenue.
She said a number of state-owned enterprises (SOEs) spent a lot on funding in 2016 and 2017, triggering slow growth in revenue. "Therefore, [the revenue increase] from the SOEs could only be seen in 2019. Freeport will be like that," she added. (bbn)