Government to soon set up holding company for state mining firms

The government?s plan to set up a holding company for state-controlled mining firms is expected to be realized soon, Bisnis Indonesia reported on Saturday.

The paper quoted Budi Gunadi Sadikin, President Director of state-owned aluminum producer PT Indonesia Asahan Aluminium (Inalum), which has been assigned to become the holding company, as saying that the required government regulation as legal basis for the setting up of the holding company is currently being finalized.

?The government regulation will be issued this month, and in mid-November it will be announced to the public. Our target is to conclude it (the setting up of the holding company) this year,? he told the paper.

Under the plan, the government will transfer its entire shares in state controlled but publicly-listed mining company PT Aneka Tambang Tbk, coal firm PT Bukit Asam Tbk, and tin giant PT Timah Tbk to Inalum.

Budi said that one of the objectives of the creation of the holding company is to control the mining resources in the country which are mostly now in the hands of foreign-controlled mining firms.

He said that to achieve the objective, the holding company could either acquire mines which are for sale or whose current contracts are set to expire, or carry out new exploration activities.

He said that holding company has been assigned to acquire the share of gold and copper giant PT Freeport Indonesia (PTFI), a subsidiary of US-based Freeport McMoRan Inc, which has an obligation to divest up to 51 percent shares to Indonesian investors. The government currently already owns 9.36 percent in PTFI. (*)