Freeport to sell 5 percent shares through IPO

PT Freeport Indonesia will sell 15 percent of the company?s shares to domestic investors as part of its program to fulfill the mandatory divestment requirement, Kontan daily reported on Saturday.

The company?s president director Rozik B, Soetjipto said in Jakarta on Friday that the 10 percent shares would be offered to the government, and another 5 percent would be sold to the public through a initial public offering.

?We will offer 10 percent to the government,? he said following a meeting with Minister of Industry MS Hidayat. Rozik said that the 10 percent shares would come from the ownership of PT Indocooper, which was acquired by Freeport?s parent company Freeport-McMoran Copper and Gold several years ago.

At present, the government has 9 percent stake in Freeport, while Freeport-McMoran owns directly 81 percent and another 10 percent indirectly through Indocooper.

Hidayat said that Freeport was also negotiating the processing of the company?s copper ores with three potential partners including PT Nusantara Smelting, PT Indosmelting and PT Indovasi Mineral Indonesia. He said that Freeport expected a memorandum of understanding agreement either with one of them or with all the three could be signed next month.

According to new mining law, exports of unprocessed minerals are banned beginning January 2014. Miners should build their own smelters or cooperate with independent smelting firms to process their mineral ores. (*)