SOEs Continues to Push the Downstream Process of Indonesia Mining Industry

By : Dina Astria And Aldo Bella Putra | Friday, July 13 2018 - 17:00 IWST

Menteri BUMN Rini Soemarno (Dok Industry.co.id)
Menteri BUMN Rini Soemarno (Dok Industry.co.id)

INDUSTRY.co.id - Jakarta - Mining Industry Holdings INALUM, Freeport McMoRan Inc. (FCX) and Rio Tinto, signed the Head of Agreement related to the sale of FCX shares and Rio Tinto's participation rights at PT Freeport Indonesia (PTFI) to INALUM. INALUM ownership in PTFI after the sale of shares and rights was 51.23% from 9.36%.

The signing was carried out by INALUM President Director Budi G. Sadikin and FCX CEO Richard Adkerson, witnessed by Finance Minister Sri Mulyani, Minister of State-Owned Enterprises Rini Sumarno, ESDM Minister Ignasius Jonan and Environment and Forestry Minister Siti Nurbaya at the Ministry of Finance, Central Jakarta on Thursday (7/12/2018).

Under the agreement, Inalum spent US $ 3.85 billion to buy FCX shares and Rio Tinto's participation rights at PTFI. The parties will complete this sale and purchase agreement before the end of 2018.

The terms of this agreement are in line with the agreement on 12 January 2018 between the Government of Indonesia, the Provincial Government of Papua, and the Government of Mimika Regency, where the local government will get a share of 10% of PTFI's share ownership.

Finance Minister Sri Mulyani said the Government is committed to maintaining an investment climate that provides certainty to investors investing in Indonesia in accordance with the permits granted by the Government in the form of a Special Mining Business License (IUPK).

With the signing of the Principles of this Agreement, FCX and INALUM cooperation is expected to improve the quality and value added of extractive industries in the future as well as to provide prosperity for the people of Indonesia.

SOE Minister Rini Soemarno said, "In line with the function of development agency, SOEs continue to drive the downstream process of the Indonesian mining industry and a high commitment to improve the welfare of all communities, especially in Papua by ensuring the share of local government in this agreement."

Minister of Energy and Mineral Resources Ignatius Jonan said With the signing of this HoA, the overall agreement with FCX includes Divestment of 51.23% shares, the agreement is higher than the divestment obligation of 51% shares as required in Government Regulation no. 1 year 2017, in addition to the change from KK to IUPK can be completed, including Commitment to Development of Processing Facility and smelter, therefore PTFI will get IUPK Production Operation extension maximum 2X10 year

We expect the added value of copper commodity to be further improved through the development of a copper smelter with a capacity of 2-2.6 million tons per year within 5 years.

Minister of Environment and Forestry Affairs Siti Nurbaya added that through the control of PTFI's majority share by INALUM, the Government expects the quality of environmental management in the PTFI mine area to be continuously improved. We believe that PTFI as one of the largest mine managers in the world, will be able to maintain the sustainability aspects of the mine affected environment.

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…