Thursday, 24 January 2019

Inalum Projects Stable Income from Freeport in 2023

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Laila Afifa

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  • Freeport CEO Richard Adkerson and Inalum CEO Budi Gunadi Sadikin during the signing of agreement related to the divestment of FCX share and Rio Tinto participation in Freeport Indonesia by Inalum at the energy ministry office, Jakarta, September 2018. Tempo/Tony Hartawan

    Freeport CEO Richard Adkerson and Inalum CEO Budi Gunadi Sadikin during the signing of agreement related to the divestment of FCX share and Rio Tinto participation in Freeport Indonesia by Inalum at the energy ministry office, Jakarta, September 2018. Tempo/Tony Hartawan

    TEMPO.CO, Jakarta - Indonesia Asahan Alumunium (Inalum) president director Budi Gunadi Sadikin said that Freeport Indonesia's production will return to stable in 2023. Inalum projects that the mining company will generate some US$2 billion profit per year after 2023.

    Budi is also confident that Inalum will be able to pay off its debts, even though Freeport's revenue is currently down due to the seized open-pit mining activities at Grasberg.

    Budi said Inalum will be able to book US$1bn revenue per year once Freeport's underground mine starts operations.

    Read: Freeport Investment at US$1.4bn/year until 2023

    "If we owe US$4bn, we can pay it back in four years. The interest is also low at just 6.0 percent," he said in Jakarta, Wednesday, January 9. 

    Once the debts are paid off, the US$1bn revenue per year will turn into profits.

    "The mine will start producing at maximum capacity in 2013, and [income] will be stable," he said. 

    At the end of last year, Inalum acquired majority ownership in Freeport Indonesia for US$3.85bn. To buy finance the acquisition, Inalum issued US$4bn global bonds with BNP Paribas, Citigroup, and MUFG acting as coordinating underwriters.

    Caesar Akbar