Freeport Warned No Reason To Delay Process Of Divestment

Jakarta (Antara Bali) - Energy and Mineral Resources Minister Sudirman Said warned PT Freeport Indonesia that change in its president director  must not cause  a drag on the process of share divestment  and construction of its smelter.

"We want to remind the management of PT Freeport Indonesia of its commitment," the minister said here on Wednesday.

Freeport President Director Maroef Sjamsuddin has resigned and a replacement was already made.

A government regulation requires Freeport, which has larger copper and gold mines in Papua, to divest 30 percent of its shares to the government or Indonesian partners.

Divestment is to be made by phases - 20 percent in 2016  and 10 percent in 2019.

This year, the divestment by Freeport would be only 10.64 percent as the government already has a 9.36 percent stake in the company.

The subsidiary of U.S. mining giant Freeport McMoRan Copper & Gold also has commitment to build  smelter in the country to process its minerals before being allowed to be exported.

Resignation of Maroef Sjamsuddin is not a reason for the management of Freeport Indonesia to delay  implementation of its commitment, Sudirman said.

The minister said evaluation is being made of the price offered by  Freeport , but he stressed the ministry is concerned more with the procedure of the divestment.

The process of divestment has to be wrapped up  in 60 days after agreement is reached on the share price, he said.

Meanwhile the government has indicated it would not buy the shares.

No fund set aside in the state budget to buy the 10.64 percent stake in Freeport Indonesia this year, Minister for National Development Planning/head of the National Development Planning Board (Bappenas) Sofyan Djalil has said.

"The government has no money for it. Even if we have, we prefer to use the money to finance infrastructure development," Sofyan said earlier.

Currently the likeliest option is for state companies (BUMN) to buy the shares, he said.

He said the BUMNs interested in the stake should start reevaluate the offer  and study the financial risks as the prices of gold  and copper are now on the decline.

BUMN Minister Rini M. Soemarno said the price set by Freeport at US$1.7 billion (Rp23 trillion) for the 10.64 percent stake was too high.

Rini said BUMNs are ready to acquire the stake but not at that level of price.  (WDY)