State Enterprises Ministry Awaits Government's Directives To Purchase Freeport's Shares

Jakarta (Antara Bali) - The Ministry of State Enterprises is awaiting the government's directives to procure 10.64 percent of the gold and copper mining firm PT Freeport Indonesia's shares, an official stated.

The ministry is focusing on establishing a state-owned mining holding company to which the government's 9.36 percent stake in Freeport will be transferred, Budi Gunadi Sadikin, the special staff of the state enterprises ministry, stated at a discussion titled "the role of state-owned mining holding company in developing mineral and coal mining in Indonesia" on Thursday.

"We will first establish the holding company, as we have not received directives from the government (to buy Freeport's shares)," he noted.

To be certain, the State Enterprises Ministry will accommodate the government's 9.36 percent stake in Freeport, he revealed.

"We have secured an approval from Freeport. Let us wait for the government's directives, as the issue is related to the authority of the Energy and Mineral Resources Ministry," he remarked.

He said the government will make every effort to buy 10.64 percent of Freeport's shares.

It was earlier reported that PT Freeport Indonesia had stopped its production activities with effect from Feb 10, 2017, following the government's decision to have greater control on raw mineral resources.

The government has proposed that the Special Mining Operations Permit (IUPK) should be used in place of the existing Contract of Work.

PT Freeport is reluctant to agree to the Indonesian government's proposal, especially since IUPK holders are obliged to divest up to 51 percent of the shares, which means they will no longer be in full control of the company.

Furthermore, Freeport is planning to sue the government in the International Court of Arbitration.

Minister of Energy and Mineral Resources Ignasius Jonan had remarked on Feb 18 that PT Freeport's plan to bring up the dispute in the International Court of Arbitration is legitimate, adding that the arbitration measure is far better than raising issues on the dismissal of employees as a tool to apply pressure on the government.

"Global corporations always treat their employees as valuable assets rather than as mere tools to gain profits," Jonan remarked.(WDY)