Govt rejects Freeport merger plan

The government has finally rejected the proposal to merge PT Indocopper Investama with New-Orleans-based gold and copper miner Freeport McMoran, the Koran Tempo newspaper reported in its Monday edition.

Both Freeport McMoran (81.2 percent) and PT Indocopper (9.4 percent) are the shareholders of PT Freeport Indonesia. The other shareholder (9.4 percent) is the Indonesian government.

Director general geology and mineral resources at Simon Felix Sembiring cited the reason was the government did not want the ownership (of PT Freeport Indonesia), which belongs to national company, fall into the hands of a foreign investor.

The government has sent the rejection letter to the Freeport Indonesia on Friday. The former instructed the latter to sell the stake of Indocopper to any national company within 6 months (180 days) from the date of issuance of the letter.

?But the resale of Indocopper?s stake will not be categorized as divestment, which is an obligatory under the contract between Freeport Indonesia and the Indonesian government,? Simon told the Koran Tempo in Jakarta on Sunday.

Indocopper?s stake was acquired by Freeport McMoran in 2002. Prior to 2002, the majority stake (51 percent) in Indocopper was owned byBakrie Group and later handed over to Mohammad ?Bob? Hasan?s PT Nusamba Mineral Industri. (*)