Eko Listiyorini and Viriya Singgih | Bloomberg | September 27, 2018
- Definitive agreement to allow Inalum to raise stake to 51%
- Accord is culmination of more than a year of negotiations
Freeport-McMoRan and Indonesia signed a binding landmark agreement for the U.S. miner to hand over majority control of the giant Grasberg copper and gold mine to a local state-owned firm, in the country’s biggest ever divestment by a foreign resources company.
Freeport Chief Executive Officer Richard Adkerson and PT Indonesia Asahan Aluminium President Director Budi Gunadi Sadikin signed a divestment deal and two other pacts in Jakarta on Thursday. The transfer of majority shares to Asahan Aluminium will happen once the company makes a payment of $3.85 billion to Rio Tinto Group and Freeport, Sadikin said.
The U.S. producer will continue to operate the mine under the agreement, which culminates more than a year of talks. The accord will allow Indonesia to issue a special mining license for Freeport to run the world’s second-largest copper mine through 2041. Freeport and Asahan Aluminium, known as Inalum, will complete the transaction before the year-end, Sadikin said.