Holding State-Owned Mining will Buy PT Freeport Shares

By : Herry Barus And Aldo Bella Putra | Saturday, November 25 2017 - 15:00 IWST

Menuju Holding BUMN Industri Pertambangan
Menuju Holding BUMN Industri Pertambangan

INDUSTRY.co.id - Jakarta - State Ministry of State-Owned Enterprises (BUMN) states that state-owned mining companies will purchase PT Freeport Indonesia's shares by utilizing loans from state-owned bank funds if the funding from equity holding is insufficient.

"If the funding is enough from the holding equity, then it is already completed, if there is not enough, then there will be a bank loan," said Deputy of Mining Business, Strategic Industries and Media at BUMN Ministry, Harry Sampurno, Friday (24/11 / 2017)

Harry explained that the role of government banking will be needed as Medco acquired Newmont.

"If Medco is assisted, we will not be assisted by state-owned companies, we will be assisted by government banks because this is a form of synergy," he said.

Harry said that when consolidated, the holding equity of the mine reached Rp64.6 trillion or Rp65 trillion. The amount, he added, will be able to increase its funding capability up to three times so it will not interfere with the financial performance of the company.

These conditions will be very different if the company is still not incorporated in one holding.

"Once the holding of Rp65 trillion is doubled to Rp120 trillion, the three-fold rule of thumb is safe," he said as quoted by Antara.

The value, continued Harry, has included a 9.36 percent stake in Freeport shares.

There is also the remaining value of the divestment of shares to be annexed by the Indonesian government up to 51 percent cannot be known because it is still in the negotiation phase.

"Let's put the figure at 3 billion US dollars. Well, we leverage it was twice as much as Rp120 trillion, so I do not need to explain again," he assured the mine holding capability to buy the divestment of shares of the US mining company.

PT Indonesia Asahan Alumunium (Inalum) will become the holding company of state-owned mining industry, while PT Aneka Tambang Tbk, PT Bukit Asam Tbk and PT Timah Tbk will become subsidiaries (holding members).

Holding the mine aims to improve business and funding capacity, management of mineral and coal resources, enhancement of added value through downstream and increase local content and cost efficiency synergies. In addition, another purpose of holding form is to control 51 percent of Freeport shares that have been agreed to be divested by the Indonesian government.

In the short term, the holding which will be officially approved on 29 November will soon conduct a series of corporate actions including the construction of a smelter grade alumina plant in Mempawah, West Kalimantan, with capacity up to 2 million tons per year; Ferro Nickel plant in Buli, East Halmahera, with a capacity of 13,500 tons per year; and the construction of a steam power plant at a downstream mill down to 1,000 MW.

News Comment

Today's Industry

GoTo is a blend of Gojek and Tokopedia. (Photo: republika.co.id)

Rabu, 30 November 2022 - 19:35 WIB

GoPay's Dominance Drives Consistency in GOTO's Financial Business Segment Growth

The financial services business segment, namely GoTo Financial owned by PT GoTo Gojek Tokopedia Tbk (GOTO), recorded impressive business growth consistency. This is reflected in GoPay's dominance…

The President Director of PT Honeywell Indonesia, Roy Kosashi, clarified many kind of leading technology for Indonesia’s New Capital City, in Jakarta on Tuesday (29/11/2022). (Photo: PT Honeywell Indonesia)

Rabu, 30 November 2022 - 19:28 WIB

Honeywell Ready to Support Indonesia’s New Capital City with Sustainability Technologies and Solutions

Honeywell announced today that it is Ready Now to support the Nusantara Capital Authority (OIKN) in realizing their goal of making a sustainable and smart forest city. OIKN is the government…

Gibu Mathew, Vice President and General Manager in Asia-Pacific (APAC) in Zoho Corp. (special)

Rabu, 30 November 2022 - 11:22 WIB

How to Make SaaS Work for Small and Medium-Sized Businesses

Southeast Asia's digital transformation has been impressive as the region is now poised to reach a projected digital economy worth USD360 billion by 2025. With digitalisation, the region bore…

PT Dharma Polimetal ("Dharma Group") Triputra Group automotive component manufacturing company.

Senin, 28 November 2022 - 12:15 WIB

DRMA Remains Optimistic 2023 Automotive Still Rises, Targets Sales Up 20%

PT Dharma Polimetal Tbk (“DRMA”), a listed company engaged in automotive component manufacturing business sees the prospects for the automotive business in 2023 will still remain promising.…

Alvara Research

Sabtu, 26 November 2022 - 06:20 WIB

Turnover Rises High, Culinary MSMEs No Problem Paying OFD Platform Commissions

Online food delivery (OFD) services have accelerated the growth of food and beverage (F&B) MSMEs in Indonesia by 1.9 times faster compared to offline sales. OFD platforms enable MSMEs to have…