Papua claims its right to buy stake in Freeport

The provincial administration of Papua has vowed to buy a 9.36 percent stake in PT Freeport Indonesia as it considers itself as the rightful buyer, the Koran Tempo newspaper reported in its Monday edition.

Papua Governor J.P. Solossa has questioned the government's plan to give the chance to state mining company PT Aneka Tambang to buy the stake, which belongs to the PT Indocopper Investama.

"It must be sold to us, why to Aneka Tambang," Solossa told the Tempo over the weekend,

He emphasized that the purchase of stake in Freeport will not affect the province's routine fnancial activites, especially poverty eradication programs. The purchase is expected to cost the Papua US$700 million.

As per the Freeport's contract, the government has the right to buy 9.36 percent stake in the lucrative mining company. But the ministry of finance said it was not interested in buying it and offered it to other interested buyers.

Papua, according to Solossa, is still waiting for the Minister of Finance's approval. If Papua gets the approval, the provincial administration has the every right to buy a stake in Freeport.

"It's our moral responnsibility because it (Freeport) is located in our province," he said.

Last month, Aneka Tambang, or Antam, said that it was mulling to buy a stake in Freeport and sought the permission from the ministry of finance.

The U.S.'s Freeport McMoran Copper & Gold Inc. (FCX) has an 81.28 percent stake in Freeport Indonesia, its wholly-owned subsidiary Indocopper Investama holds 9.36 percent, and the Indonesian government has the remaining 9.36 percent.

The company has been operating one of the world's largest gold and copper mine in the country's eastern province of Papua since signing a contract with the government in April 1967.(*)