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Papua, Mimika must buy Freeport shares: Inalum

Jakarta Post - July 24, 2018

Stefanno Reinard Sulaiman, Jakarta – The regional administrations of Papua province and the Mimika regency must purchase their 10 percent shares in gold and copper miner PT Freeport Indonesia (PTFI), which operates the Grasberg mine in Papua, state mining holding company PT Indonesia Asahan Aluminium (Inalum) has said.

But Inalum president director Budi Gunadi Sadikin has said Inalum would help the local administrations in obtaining loans and that they could pay the installment with dividends from PTFI.

"We will pay for all initial transactions and the installments will be from the dividends. However, if [the administrations] have the funds, there is no need for a loan," Budi said on Monday.

The shares would be distributed to the Papua and Mimika administrations after the divestment process was completed and Inalum took control of 51 percent shares in PTFI.

In January, the central government signed a memorandum of understanding (MoU) with the Papua and Mimika administrations on distributing 10 percent shares of PTFI to the two local administrations.

The Finance Ministry has said that the funds to finance the 10 percent stake would use neither the state budget nor the regional budgets.

Meanwhile, during a meeting with the House of Representatives on Monday, it was revealed that Inalum and the Papua and Mimika administrations planned to establish a special purpose vehicle (SPV) to hold 25 percent shares of PTFI.

Inalum would hold 60 percent of the SPV, while the Papua and Mimika administrations would hold the other 40 percent. (bbn)

Source: http://www.thejakartapost.com/news/2018/07/24/papua-mimika-must-buy-freeport-shares-inalum.html