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Papuan governments haven't agreed over ownership shares in Freeport

Jakarta Post - April 8, 2019

Victor C. Mambor, Jayapura – State-owned mining holding company PT Indonesia Asahan Aluminium (Inalum) is waiting for a deal to be made between the Papua provincial and Mimika regental administrations on the ownership of 10 percent of the 51.23 percent of shares owned by Inalum in PT Freeport Indonesia (PTFI).

Inalum head of corporate communications Rendi Witular said the ownership of the PTFI shares for the two local administrations had not been formalized because neither government had agreed on a percentage split.

"We are still waiting for the establishment of a regional administration-owned enterprise (BUMD) by the provincial and regental governments. The ball is in their hands as Inalum waits for them," Rendi said when asked to comment on the issue on Saturday.

Rendi explained that in February, the Mimika regental administration sent a letter to President Joko "Jokowi" Widodo to protest the distribution of shares stipulated in Papua Provincial Bylaw No. 7/2018 on BUMD PT Papua Divestasi Mandiri, which would manage PTFI's shares.

Under the bylaw, the distribution of the 10 percent of PTFI shares would go as follows: 51 percent for the Papua provincial administration; 29 percent for the Mimika regental administration and 20 percent for other regencies located close to the PTFI mining site.

Meanwhile, an agreement signed by Inalum, the Papua provincial administration and the Mimika regental administration on Jan. 12, 2018 stipulates that 7 percent of the 10 percent of shares is owned by Mimika, while 3 percent is owned by the provincial administration.

"The Mimika regental administration does not agree with the content of Bylaw No. 7/2018, particularly Article 15 that rules on the ownership shares of PT Papua Divestasi Mandiri. It was not in line with the basic [previous] agreement," Rendi added.

In late March, Mimika Regent Omaleng threatened to establish a BUMD that is separate from the enterprise established by the provincial administration.

Rendi explained that before the regent sent the letter to the President, there was an effort to mediate the differences through a meeting on Jan. 11 at the Finance Ministry, but the Papuan provincial administration had not revised Article 14 of Bylaw No. 7/2018.

Papua Governor Lukas Enembe said he had not planned to revise the bylaw, including the composition of shares stated in it.

He said he would meet with PTFI executive vice president Tony Wenas and Freeport McMoran CEO Richard Adkerson in the United States in May. (bbn)

Source: https://www.thejakartapost.com/news/2019/04/08/papuan-governments-havent-agreed-over-ownership-shares-in-freeport.html