Danantara confirms Freeport will divest 12% stake in PTFI free of charge

Indonesia’s sovereign wealth fund Danantara has confirmed that U.S. mining company Freeport-McMoRan has agreed to divest an additional 12 percent stake in PT Freeport Indonesia (PTFI) to the Indonesian government at no cost.

Rosan Perkasa Roeslani, CEO of Danantara and Minister of Investment and Downstreaming, announced on Tuesday (September 30) that the agreement would increase Indonesia’s total ownership in PTFI to over 63 percent.

“They’ve agreed to the 12 percent,” Rosan said. “While I was in the U.S., I met directly with Freeport-McMoRan’s CEO, Kathleen Quirk, and the company’s ownership. They agreed to transfer the 12 percent stake free of charge. Previously, we had negotiated a gradual 10 percent divestment, but thank God, it’s now 12 percent.”

Rosan also noted that Freeport plans to invest further in Papua by building two hospitals and two universities to improve healthcare and education in the region.

“They will build two hospitals and two centralized universities aimed at strengthening the role of medical professionals in Papua,” he added.

Earlier, Minister of Energy and Mineral Resources Bahlil Lahadalia confirmed that the government is preparing to extend PTFI’s Special Mining Business License (IUPK), which is currently set to expire in 2041.

A key requirement for the extension is that the Indonesian government must increase its equity stake in PTFI by more than 10 percent. At present, the state, through the mining holding company MIND ID, holds 51.23 percent of the company.

“I recently held discussions with Freeport-McMoRan and PTFI President Director Tony Wenas regarding the IUPK extension and the additional divestment above 10 percent,” Bahlil said on September 26).

Read also: PTFI exports 65% of copper concentrate quota, eyes 90% by mid-September

He explained that underground mining operations, such as those at the Grasberg site, Central Papua, require long-term planning and investment. The current production levels are the result of exploration efforts that began in 2004. Without a permit extension, output is expected to peak in 2035 and decline thereafter, posing a risk to state revenues, jobs, and regional economic growth.

“Exploration for underground mining takes 10 to 19 years. If we don’t extend the permit soon, Freeport’s peak production will occur in 2035 and then decrease,” Bahlil warned.

Bahlil also confirmed that the additional share transfer will not involve a formal valuation. “If there is any valuation at all, it will be very minimal. The government has requested that the shares be transferred at the lowest possible price,” he said.

The upcoming divestment follows the Indonesian government’s landmark acquisition in 2018, when it raised its stake in PTFI from 9.36 percent to 51.23 percent through a $3.85 billion deal, marking a major milestone in Indonesia’s efforts to regain control over its strategic mineral resources.

Meanwhile, Freeport has recently announced the suspension of operations at the Grasberg Block Cave (GBC) mine after a landslide trapped seven workers. The incident has claimed two lives, while five individuals remain missing as of Friday.

Freeport warned last week that copper output in 2026 could fall as much as 35 percent below pre-incident forecasts, with production from the affected PB1C block not expected to resume until 2027.

The GBC ore body accounts for around 70 percent of projected copper and gold output through 2029 for PTFI, the operator of the Grasberg complex. With production from other blocks set to ramp up only gradually from early 2026, industry analysts expect global copper supply to remain under pressure well into next year.

Editing by Reiner Simanjuntak