Freeport shares must be offered to govt first: Official

PT Indocopper Investama’ stake in PT Freeport Indonesia must be offered first to the government, the Koran Tempo newspaper quoted a senior official in its Tuesday edition.

This mechanism is in line with the contract of work, which was awarded to New Orleans based copper and nickel mining firm Freeport McMoran, the majority-shareholder of PT Freeport Indonesia, by the government.

“As per the contract, if it (Freeport) wants to sell shares, it must offer them to the government first, director-general of mineral resources and geology Simon Felix Sembiring said on Monday in Jakarta.

On Friday, the government has finally rejected the proposal to merge PT Indocopper Investama with Freeport McMoran.

Both Freeport McMoran (81.2 percent) and PT Indocopper (9.4 percent) are the shareholders of PT Freeport Indonesia. The other shareholder (9.4 percent) is the Indonesian government.

Simon cited the reason was the government did not want the ownership (of PT Freeport Indonesia), which belongs to national company, fall into the hands of a foreign investor.

The government has sent the rejection letter to the Freeport Indonesia on Friday. The former instructed the latter to sell the stake of Indocopper to any national company within 6 months (180 days) from the date of issuance of the letter.

“But the resale of Indocopper’s stake will not be categorized as divestment, which is an obligatory under the contract between Freeport Indonesia and the Indonesian government,” Simon said on Sunday.

Indocopper’s stake was acquired by Freeport McMoran in 2002. Prior to 2002, the majority stake (51 percent) in Indocopper was owned by Bakrie Group and later handed over to Mohammad “Bob” Hasan’s PT Nusamba Mineral. (*)