VP demands foreign mining firms to launch IPO at home

Courtesy of IDX

Vice President Jusuf Kalla urged Minister of Energy and Mineral Resources Ignasius Jonan to issue a new regulation requiring foreign-controlled mining companies operating in the country to launch initial public offering (IPO) in local bourse.

Kalla was quoted by Bisnis.com as saying that foreign-controlled firms exploiting the country?s natural resources must offer shares to local investors via IPO in the domestic stock market.

?We will ask the minister to have more attention and issue a new regulation in line with this,? he said on Tuesday in response to question raised by Franky Welirang, Head of the Indonesian Publicly Listed Companies Association.

Director General of Mineral and Coal Bambang Gatot Ariyono said in late November that the ministry has yet to start the process of drafting the required regulation to implement a planned option for foreign-controlled mining firms to carry out its mandatory divestment program via IPO mechanism.

He said that without the required legal umbrella, the IPO option can?t be implemented.

He said that one of the alternatives is by revising Government Regulation No 77/2014 on coal and mineral mining operation, which stipulates that mining firms controlled by foreign investors are required to divest its stake to local investors. The regulation, however, doesn?t specify whether IPO can be a mechanism to realize divestment obligation.

Minister of Energy and Mineral Resources Ignasius Jonan said during a meeting with miners last year that the government was considering allowing the mining firms to implement the divestment mandatory program via IPO.

Newly-appointed President Director of gold and copper giant PT Freeport Indonesia Chappy Hakim said that the company is likely to take the IPO option in realizing its planned divestment of 10.64 percent shares.

PT Freeport is a subsidiary of US-based Freeport McMoRan Copper & Gold Inc. (*)