Gov't Appoints Banker Budi Sadikin to Head Inalum, Prepare Freeport Divestment
Jakarta. The government has appointed seasoned banker Budi Gunadi Sadikin on Thursday (14/09) to head Indonesia Asahan Aluminium, or Inalum, the country largest aluminum smelter, to oversee the merger of state-owned mining firms under the company.
Inalum will also play major part in taking over the divested share of Freeport Indonesia, the country's largest gold miner and subsidiary of United States-based mining giant Freeport McMoRan.
Budi led Indonesia's largest lender, Bank Mandiri, from 2013 to 2016, overseeing the $130 million acquisition of Asuransi Jiwa InHealth Indonesia. He spent the past 15 months as a special staffer to State Owned Enterprises Minister Rini Soemarno.
"[He] was deliberately prepared [for the Inalum assignment]," Rini told reporters on Thursday, referring to Budi's stint at the ministry.
As Rini's special staffer, Budi helped prepare a holding structure for state-owned mining companies.
"He is very capable. He was the president director of Mandiri and we know he has the ability to transform Inalum into a holding company," the minister said.
The government also plans for Inalum to acquire Freeport Indonesia shares that will become available as a result of the miner's long-delayed 51-percent divestment.
The miner still has to sell 40.64 percent of its shares to reach the divestment target, having sold 9.36 percent several years ago.
Negotiations on the divestment have yet to resolve the valuation of Freeport Indonesia. The company believes it should include the mineral resources present at its Grasberg Mine in Papua, while the Indonesian constitution states that all mineral resources essentially belong to the state and not the mine operator.
According to the latest negotiations last year, Freeport valued the mine operation at $16.2 billion, while Indonesia valued it at $5.9 billion.
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