Freeport's Grasberg mine in Papua has the world's biggest gold reserves and is also one of the world's top suppliers of copper. (Reuters Photo/Muhammad Yamin)
Freeport Indonesia Pays First Dividend in Three Years
BY : ADINDA NORMALA
JANUARY 16, 2018
Jakarta. Gold and copper miner Freeport Indonesia – the local unit of US mining giant Freeport McMoRan – paid its first dividend in three years to the Indonesian government in 2017, a Finance Ministry official said on Monday (15/01).
Freeport paid the government – that has a 9.36 percent stake in the company – a dividend of Rp 1.4 trillion ($112 million) last year.
The miner operates one of the world's largest copper and gold mines in Papua, Indonesia's easternmost province.
Freeport, citing falling commodity prices, suspended its annual dividend payment in 2015 to strengthen its balance sheet.
"There was a dividend payment of Rp 1.4 trillion from Freeport [last year]," Askolani, director general for budgeting at the Ministry of Finance, said during a press conference.
"Freeport did not pay any dividend in the two years before that. We know they had a business problem and needed new investment, so they stopped paying," Askolani said.
Freeport decided to pay the dividend again thanks to improving commodity prices in the global market.
The Indonesian government earned Rp 44.5 trillion in dividends from various companies it has stakes in last year – 8 percent more than its original target of Rp 41 trillion.
Freeport Indonesia is one of the largest taxpayers in Indonesia, having paid more than $16 billion in royalties, taxes and dividends to the government between 1992 and 2015, according to data from the company.
In August last year, Freeport agreed to reduce its majority stake in the miner to 49 percent, build a local copper smelter and pay more taxes and royalties with hopes to extend its contract to operate the massive Grasberg mine until 2041.
Tough negotiations between the Indonesian government and Freeport on the contract are expected to continue until June.