State-owned miner Inalum is looking to finalize a $3.85 billion deal for majority control of the local unit of global mining giant Freeport McMoRan in December, a company official said on Wednesday. (SP Photo/Primus Dorimulu)
Inalum Looks to Close Freeport Deal in December: Official
BY :WILDA ASMARINI
OCTOBER 18, 2018
Jakarta. State-owned miner Inalum is looking to finalize a $3.85 billion deal for majority control of the local unit of global mining giant Freeport McMoRan in December, a company official said on Wednesday.
The deal, in which Inalum will control a 51.23 percent stake in Freeport Indonesia, is expected to end more than nine years of wrangling between Freeport and Indonesia over ownership rights to Grasberg, the world's second-biggest copper mine.
However, the planned transactions are still subject to the issue of environmental recommendations and a special mining permit (IUPK) by the government, Inalum chief executive Budi Gunadi Sadikin told the national legislature.
"[Freeport Indonesia] is continuing to lead discussions with the Ministry of Environment and Forestry," Budi said. "We hope this can be completed as quickly as possible."
A 2017 report by the Supreme Audit Agency (BPK) referred to an estimate that Freeport's decades-long operations at the mine in Papua had caused environmental damage worth $13.25 billion.
That damage, it said, was largely a result of tailings from the mine that had extended beyond previously agreed limits and which had polluted coastal areas.
In April, in follow-up action to the audit, the environment minister issued two decrees that gave Freeport six months to overhaul the management of tailings from Grasberg. One of the decrees said Freeport would be barred from any activities in areas that lack environmental permits.
These matters have complicated the issue of a new mining permit for Grasberg, which would be held by Inalum.
Freeport Indonesia executive director Tony Wenas said the company was fully compliant with the country's environmental impact rules. Freeport hoped "in the near future the environment and forestry ministry issues a policy" related to Grasberg, he said.
"We are discussing several options," Tony said, referring to the possibility of reducing tailings sediment, methods for tailings removal and expansion of mangrove wetlands, among other options.
Last month, Freeport and its Grasberg mining partner Rio Tinto struck a binding accord to sell a majority stake in Grasberg to Inalum.
At that time, Budi said the transactions would be concluded in November.