Indonesia expects deal soon with Freeport-McMoRan on divestment plan

Indonesia expects to soon sign a deal with Freeport-McMoRan to give a local partner a 12% stake in its Indonesian unit PT Freeport Indonesia, the investment minister said on Wednesday, without giving a precise date.

The state mining holding company MIND ID so far owns 51% of PT Freeport Indonesia, which runs operations at Grasberg, the world’s largest gold mine and second-largest copper mine.

“This is just an administrative process but we have already agreed on all of points (of discussions)… Once it is done, we can proceed with the signing,” Minister Rosan Roeslani told reporters.

He added that the 12% will be “free of charge”.

On Tuesday, Phoenix-based Freeport said it was still in discussion with the Indonesian government regarding the rights to operate the Grasberg copper and gold mine beyond 2041 when an existing deal expires.

Freeport Indonesia had no immediate comment when asked about the Indonesian investment minister’s comments on Wednesday.

Indonesia mining minister Bahlil Lahadalia last week said it was important to reach a deal to extend the Freeport mining permit to ensure the company could start investing in exploration for future resources to be extracted from Grasberg.

Also last week, Freeport declared force majeure at Grasberg after torrential mudslides that killed two workers.

Grasberg may not return to pre-accident operating rates until at least 2027, Freeport said.

Concerns about the impact on supply have driven up global prices of copper.

(By Fransiska Nangoy and Ananda Teresia; Editing by John Mair and Barbara Lewis)