Indonesian Government, Freeport Continue Divestment Negotiation

TEMPO.CO, Jakarta - The Indonesian government and Freeport Indonesia are currently continuing the negotiation on the 51 percent divestment timing.

“I think the 51 percent deal is done. The current issue being raised is when the 51 percent share divestment will be realized, and it is negotiable,” said Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan after attending the Social Good Summit in Jakarta today, Oct. 4.

According to Luhut, the negotiation between both parties have not been finalized, “it hasn’t been finalized,” said the Minister.

Read: Luhut: Freeport's Share Divestment Timing Being Discussed

He revealed that the government is attempting to push its right based on the contract of work (CoW) that was ratified by both parties. The contract signed in 1991 says the American mining giant is required to divest 51 percent of its share to Indonesia gradually within a 20-year timespan.

But until 2011, Freeport Indonesia’s share that has been divested was only 9.36 percent. Moreover, he claims that later on when the Indonesian Government retains Freeport’s 51 percent share, the government will have the right to fully control the company.

Previously on September 28, Freeport sent the government a letter of rejection regarding the 51 percent divestment scheme that was signed by President and Freeport McMoRan Inc. CEO Richard C Adkerson.

ANTARA