Freeport expected to start share divestment Oct 14

Gold and copper giant PT Freeport Indonesia is expected to start offering its shares to the government on October 14 as part of the company?s mandatory divestment program.

Director General of Mineral and Coal Bambang Gatot Ariyono said on Thursday that the Ministry of Energy and Mineral Resources (MEMR) will then have 90 days to make price negotiation with PT Freeport.

Once the two sides have reached agreement over the value of the shares, the MEMR will then make a proposal to the Ministry of Finance, which will decide on whether the government would acquire the shares or appoint a state-owned enterprise to carry out the acquisition.

According to the existing regulation, PT Freeport, which operates an underground mine in Papua, is obliged to divest up to 30 percent stake to Indonesian investors with first priority given to the central government, followed by stated-owned company, local Papua government-owned company, and lastly national private investors.

The government currently holds more than 9.3 percent stake in PT Freeport, which is obliged to divest another 10.64 percent shares this year.

Meanwhile, Kontan quoted PT Freeport spokesman Riza Pratama as saying Friday that the company is still waiting for the proposed divestment mechanism from the government. As such, the company has yet to assign valuation to its shares.

The government is currently in the process of revising Government Regulation No 77/2014, which is the legal basis for the mandatory divestment program. (*)