Freeport McMoRan Hope to Keep Managing Company Post-Divestment
26 April 2018 11:14 WIB
TEMPO.CO, Jakarta - Despite having agreed on the 51 percent share that Freeport Indonesia must divest to the government, Freeport McMoRan Inc. is still clinging its hopes on maintaining the company’s business and financial policies.
Freeport McMoRan CEO Richard C. Adkerson said that it is important for his company to continue supervising Freeport Indonesia that corresponds to its business approach. He also said that this has been continuously negotiated with the Indonesian government.
Other than that, Adkerson sees the government’s step on purchasing 40 percent of Rio Tinto’s participation rights in Freeport Indonesia as a positive strategy.
Furthermore, he said that his company will not be directly involved in the negotiation process regarding Rio Tinto’s participation rights.
As it is known, buying out Rio Tinto’s participation rights will reduce the direct effect towards Freeport-McMoRan that currently controls 91.64 percent of the mining company’s shares. By buying Rio Tinto’s participation rights, Freeport McMoRan would only need to divest a little more.
Rio Tinto has invested 40 percent in the Papuan Grasberg Mine through a partnership with Freeport-McMoRan back in 1996.
Until the end of 2021, Rio Tinto will have the rights to 40 percent if the production reaches a certain agreed level. After that, Rio Tinto’s 40 percent share will be calculated based on Freeport Indonesia’s total production or income.
If Rio Tinto’s participation rights turn to 40 percent in Freeport Indonesia’s shares, then Freeport McMoRan’s 81.28 percent share will be diluted to 48.768 percent. Meanwhile, its sister company, Indocopper Investasma and the Indonesian Government that owns 9.36 percent shares will be diluted to 5.616 percent.
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