Govt may oppose Freeport-Indocopper merger plan

The government may oppose the planned merger of PT Incopper Investama into the United States-based Freeport McMoran Copper and Gold, the majority shareholder of gold mining giant PT Freeport Indonesia on the ground that the widely criticized merger plan would hurt national interest, Koran Tempo reported on Tuesday.

Director General of Geology and Mineral Resources Simon Felix Sembiring said in Jakarta last week that the legal team of the ministry of energy and mineral resources found that the planned merger would hurt the national interest.

The legal team, according to Simon, viewed that the merger of Indocopper was against the mission of the company, which was established years ago to represent national interest in Freeport Indonesia.

If the Indocopper is acquired by McMorran Copper and Gold, no one will represent national interest in Freeport, he said.

The government is currently studying the planned merger of Indocopper into Freeport McMorran.

Freeport McMorran acquired the majority stake in Indocopper, which owned 9.36 percent stake in Freeport Indonesia through the capital market in 1992.

As part of its business consolidation, Freeport McMorran planned to merge Indocopper into the company. This will increase its ownership in the world's copper and gold giant to 90.64 percent from 81.28 percent at present. The other 9.36 percent are held by the Indonesian government. (*)