Govt’s dividend from Freeport must increase next year: Official

The government as a minority shareholder of gold and copper giant PT Freeport Indonesia has asked the company to pay a higher dividend next year, the Koran Tempo newspaper reported in its Monday edition.

Deputy to the State Minister for State Enterprises Roes Aryawijaya said this request was already conveyed to the management of Freeport during the annual shareholders meeting last week

“The 2004 dividend must increase,” Roes told the Koran Tempo over the weekend.

“Freeport-McMoran Copper and Gold Inc. (the majority owner of Freeport) and the Freeport management said they would evaluate the government’s request," he said.

During its annual shareholders meeting held in Jakarta on Friday, PT Freeport rejected the government’s proposal to increase the percentage of dividend payment for financial years 2002 and 2003 (20 percent of net profit).

But instead of increasing the dividend, PT Freeport decided to pay less dividend for 2002 and 2003 in compared to the year 2001, arguing that the company needed cash to finance operation (according to Roes as stated in the earlier report).

PT Freeport agreed to allocate 13 percent of 2002 net profit of US$398.5 million as dividend, and 11 percent of 2003 net profit of $484 million as dividend.

So, the government as an owner of a 9.36 percent stake in PT Freeport will receive $4.8 million (for 2002) and $4.99 million (for 2003) as dividend.

New Orleans- based Freeport-McMoran Copper and Gold Inc, controls Freeport through its 90.64 percent stake in the company.

For 2001, PT Freeport distributed a 15 percent dividend ratio, in which the government received $4.5 million.(*)