Government must issue regulation on IPO option for divestment of mining firms
Saturday, November 26 2016 - 06:43 AM WIB
Petromindo
The government has yet to start the process of drafting the required regulation to implement a planned option for foreign-controlled mining firms to carry out its mandatory divestment program via an initial public offering (IPO) mechanism.
?No discussion yet (on the regulation),? said Director General of Mineral and Coal at the ministry Bambang Gatot Ariyono as quoted by Investor Daily Saturday.
He said that without the required legal umbrella, the IPO option can?t be implemented.
He said that one of the alternatives is by revising Government Regulation No 77/2014 on coal and mineral mining operation, which stipulates that mining firms controlled by foreign investors are required to divest its stake to local investors. The regulation, however, doesn?t specify whether IPO can be a mechanism to realize divestment obligation.
Minister of Energy and Mineral Resources Ignasius Jonan said last week during a meeting with miners that the government is considering allowing the mining firms to implement the divestment mandatory program via IPO.
Newly-appointed President Director of gold and copper giant PT Freeport Indonesia Chappy Hakim said that the company is likely to take the IPO option in realizing its planned divestment of 10.64 percent shares.
PT Freeport is a subsidiary of US-based Freeport McMoRan Copper & Gold Inc. (*)