Gold and Copper Mining Company Freeport Indonesia will Divest Shares
Freeport Indonesia, subsidiary of Freeport-McMoRan Copper & Gold Inc (one of the world's largest producers of copper and gold), will list five percent of its shares on the Indonesia Stock Exchange through an initial public offering (IPO). Freeport will also sell 10.64 percent of its shares to the Indonesian government. The news was announced by MS Hidayat, Indonesia's minister of Industry, after a meeting in Jakarta with the management of Freeport. Currently, 90.64 percent of Freeport Indonesia's shares are owned by Freeport-McMoRan.
The remaining 9.36 percent is already in the hands of the Indonesian government. Therefore, 20 percent of Freeport Indonesia's shares will be owned by the government after the deal. When exactly the shares will be divested is not clear yet.
Freeport had been in talks with the Indonesian government concerning a 20-year extension to which it is entitled to according to an agreement made in 1991. The government, however, targets for more revenue from Indonesia's natural resources and wants Freeport to comply with the new 2009 Mining Law. This law includes limits to concession areas for miners, stipulates an increase in government royalties, and foresees larger domestic ownership through share divestment. For that reason, talks regarding a share divestment had been ongoing for several years.
