Govt fails to get an increase in dividend from Freeport

The government as a minority shareholder of the gold and copper giant PT Freeport Indonesia has failed to get a raise in dividend from that company, the Koran Tempo and the Investor Daily Indonesia newspapers reported on Saturday.

During an annual shareholders meeting of PT Freeport held in Jakarta on Friday, parent company Freeport-McMoran Copper and Gold Inc rejected the government’s request for the increase in dividend payment for the 2002 and 2003 financial years.

Instead of increasing the dividend, PT Freeport decided to pay less dividend for 2002 and 2003 in compared to the year 2001.

Deputy to the State Minister for State Enterprises Roes Aryawijaya said the government wanted PT Freeport to pay 20 percent of 2002 and 2003 net profit of the company as dividend to its shareholders.

This would translate into a total dividend of around US$80 million (Rp 729 billion) for the government. This figure was proposed after the government’s examination of PT Freeport’s financial performance, which has been on the rise for several years.

But Roes said the PT Freeport management didn’t heed to the government’s request to increase the dividend during the shareholders’ meeting.

“The management cited the company needed (more) cash to run the business,” Roes told the journalists after the shareholders’ meeting on Friday,

At last, PT Freeport shareholders agreed to the management’s proposal under which the company will pay 13 percent of 2002’s net profit of $398.5 million as dividend, and for the 2003, the company will pay 11 percent of its net profit of $484 million as dividend.

So, the government as an owner of 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, controls PT Freeport through its 90.64 percent stake in the company. (*)