2) Papua to get Freeport’s shares
3) Indonesia lays groundwork for transfer of Grasberg mine to local control
4) Freeport’s exports fall short of quota
5) PT Freeport`s 51% divestment not negotiable: Indonesian minister
6) Batik Air to launch Surabaya-West Papua route on Jan. 19
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1) Indonesia sets framework for Freeport to yield control of Grasberg mine
Freeport is divesting a 51% stake in Grasberg to local interests in return for full operational control until 2041 plus fiscal and legal guarantees. (Image: Google Earth.)
Indonesian authorities inked Friday a deal with state-owned holding Asahan Aluminum, or Inalum, which sets a framework for Freeport-McMoRan (NYSE:FCX) to transfer control of its massive Grasberg copper and gold mine as agreed last year.
The country and the Phoenix, Arizona-based miner had arranged in principle in August that up to a 51% stake in Freeport’s local unit, PT Freeport Indonesia (PTFI), would be given to “Indonesia interests,” based on a new mine licence replacing existing contracts.
Inalum said Friday it was grabbing a 41.64% stake in the local unit of Freeport, which increases its current ownership in it to 51%. In return, the US miner will be allowed to keep the mine open until 2041.
It also means that Papua provincial government and Mimika regency will jointly own rights to a 10% of PTFI after the divestment is completed, according to AntaraNews.com.
The price of the transaction has yet to be agreed upon, Dow Jones Newswires reports.
The deal is considered a victory for President Joko Widodo, who faces re-election in 2019 and who has insisted that mining companies must divest majority stakes in order to continue operating in the country.
Grasberg is the world’s second-biggest copper mine and is located in the eastern Indonesian province of Papua.
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2) Papua to get Freeport’s shares
Marchio Irfan Gorbiano The Jakarta Post
Jakarta | Fri, January 12, 2018 | 07:38 pm
The central government signed a memorandum of understanding (MoU) with the Papua provincial administration and the Mimika regency administration on Friday, granting the local government a 10 percent stake in the coming divestment of gold and copper miner PT Freeport Indonesia (PTFI).
The government was represented by the Finance Ministry, the Energy and Mineral Resources Ministry and state-owned aluminum firm PT Indonesia Asahan Aluminium (Inalum).
Finance Minister Sri Mulyani Indrawati said that under the MoU, both the Papua administration and Mimika regency would jointly own a 10 percent stake out of the 51 percent of divested PTFI shares. Negotiations between the government and PTFI are still taking place.
“The portion of the stake was to accommodate the rights of the indigenous people, which are affected by PTFI’s [operation],” she told reporters on Friday.
Discussions over the transaction mechanism between Inalum and the local administrations were underway, she said, adding that the transactions would use neither state budget nor regional budget funds.
Inalum president director Budi Gunadi Sadikin said the signing of the MoU had settled the issue of the allotment of shares among central and local governments in the coming divestment of PTFI, a local subsidiary of United States-based mining giant PT Freeport-McMoRan.
The government previously extended the temporary permit of PTFI to June 30, allowing the latter to resume its operation while negotiations take place. (bbn)
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3) Indonesia lays groundwork for transfer of Grasberg mine to local control
JANUARY 12, 2018 / 6:16 PM / UPDATED 13 HOURS AGO
Reuters Staff
4 MIN READ
JAKARTA, Jan 12 (Reuters) - Indonesian regional and central government officials on Friday signed an agreement with state holding company PT Inalum that lays the foundation for the transfer of Freeport-McMoRan Inc’s giant Grasberg copper mine to local control.
Indonesia and Papua have long pushed for greater control over Grasberg and the new ownership structure may ease tensions over spoils from the world’s second-biggest copper mine, which has been a focal point for local separatists.
Indonesia and Freeport agreed in principle in August to set up the U.S. company’s rights to Grasberg under a new mine license system from an existing contract of work, and the American miner said it would divest up to 51 percent of its local unit to “Indonesia interests”.
Under the agreement signed on Friday, Papua Provincial Government and the Mimika Regency will jointly own rights to a 10 percent share in PT Freeport Indonesia (PTFI) once they have been divested, the Finance Ministry said in a statement.
“This portion of share ownership rights is for the interests for the indigenous land owners and members of the community facing permanent impacts,” the statement said.
“The agreement signed today is a strategic step forward in efforts to acquire shares divested by PTFI,” it said.
A Jakarta-based spokesman for Freeport Indonesia declined to comment on the matter.
Inalum, which holds ownership of all state-owned mining companies, has been nominated to acquire an additional 41.64 percent in Freeport Indonesia, which would take Indonesia’s share of PTFI to 51 percent, up from 9.36 percent now.
The 10 percent to be held by Papua and Mimika would be part of this Inalum holding, government officials have said previously.
A government source with knowledge of the matter said the memorandum of understanding signed on Friday was an initial step in the acquisition process and would allow the transaction involving the Indonesian parties to be carried out through a “single window”.
“The next step that still needs to be worked on is the completion of rights and obligations between shareholders and Freeport, as well as the valuation,” the source said.
Coal and Minerals Director General Bambang Gatot said on Thursday the government is targeting to complete contract discussions with Freeport by June, noting that divestment issues had not been resolved yet.
Freeport’s divestment may involve liquidation of a joint venture that Freeport Indonesia, operator of Grasberg, formed with Rio Tinto in 1996.
Under that venture, Rio has a 40 percent interest in PTFI’s Grasberg contract, which entitles them to a 40 percent share of all production after 2022. Rio has held talks with Indonesia about a possible exit to the venture.
Indonesia’s proposal could see Rio’s interest in Grasberg output being converted to shares in PTFI to make up the lion’s portion of the government purchase, provided all parties can agree to the structure and price of the deal, Mining Minister Ignasius Jonan said in December.
A Melbourne-based spokesman for Rio declined to comment.
Reporting by Cindy Silviana and Wilda Asmarini in JAKARTA; Additional reporting by Jim Regan in SYDNEY; Writing by Fergus Jensen; Editing by Tom Hogue
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4) Freeport’s exports fall short of quota
Viriya P. Singgih, The Jakarta Post
Jakarta | Fri, January 12, 2018 | 04:31 pm
Gold and copper miner PT Freeport Indonesia (PTFI) exported a total of 921,137 tons of copper concentrates in the period from February to December 2017, or 82.7 percent of the yearly quota set by the government.
The government granted PTFI, a subsidiary of American mining giant Freeport-McMoRan, a one-year permit in February 2017 to export 1.11 million tons of copper concentrates.
“As of December 2017, PTFI’s realized exports stood at only 921,137 tons,” the Energy and Mineral Resources Ministry's mineral and coal director general Bambang Gatot Ariyono said on Thursday.
The export quota was given in return for PTFI’s commitment to build a new copper smelter in Gresik, East Java, by 2022. The government will monitor the facility’s development progress at least once every six months before giving another export permit for the company.
PTFI has previously calculated that it will need around US$2.2 billion for the new smelter. The facility will have an annual input capacity of 2 million tons of copper concentrate and output capacity of 460,000 tons of copper cathode and 5,800 tons of anode slime, among other products.
“PTFI has yet to submit a proposal to us to get a recommendation for another export permit. But, of course, we will have to evaluate the development progress of company’s new smelter first,” Bambang said.
Meanwhile, another gold and copper miner, PT Amman Mineral Nusa Tenggara, exported around 560,000 tons of copper concentrates in the February-December period last year, or 82.9 percent of its yearly quota of 675,000 tons (bbn)
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5) PT Freeport`s 51% divestment not negotiable: Indonesian minister
Reporter: antara 5 hours ago
Jakarta (ANTARA News) - Indonesia`s finance minister Sri Mulyani stated here on Friday that the divestment of PT Freeport Indonesia shares up to 51 percent is mandatory and not negotiable.
"We can assure a commitment of up to 51 percent shares divestment, which is in line with the instruction of the President and is non-negotiable," she asserted at the signing of an agreement for the distribution of part of the shares to be divested to the regional government of Papua.
Mulyani noted that negotiations on more detailed items with PT Freeport are still underway.
She stressed she could not reveal more on the negotiations as the government was committed to completing the whole process before releasing any information to the public.
"So, it does not mean we are not transparent, but we honor corporate management," she clarified.
Mulyani reiterated that the 51 percent divestment would be a priority of the Indonesian government.
"We are moving in the right direction and will make it public as soon as it is completed," she added.
The central government and the administrations of Papua Province and Mimika District, as well as PT Inalum, have signed an agreement for the distribution of the divested shares of the copper and gold mining company PT Freeport Indonesia to these regions.
Based on the agreement, Papua and Mimika together will have rights over 10 percent of the shares of PT Freeport Indonesia after the divestment.
The agreement is one of the strategic and advanced steps related to the divestment after the principal agreements were struck between the Indonesian government and PT Freeport Indonesia on August 27, 2017.
Reported by Satyagraha
(H-YH/INE)
EDITED BY INE/B003
"We can assure a commitment of up to 51 percent shares divestment, which is in line with the instruction of the President and is non-negotiable," she asserted at the signing of an agreement for the distribution of part of the shares to be divested to the regional government of Papua.
Mulyani noted that negotiations on more detailed items with PT Freeport are still underway.
She stressed she could not reveal more on the negotiations as the government was committed to completing the whole process before releasing any information to the public.
"So, it does not mean we are not transparent, but we honor corporate management," she clarified.
Mulyani reiterated that the 51 percent divestment would be a priority of the Indonesian government.
"We are moving in the right direction and will make it public as soon as it is completed," she added.
The central government and the administrations of Papua Province and Mimika District, as well as PT Inalum, have signed an agreement for the distribution of the divested shares of the copper and gold mining company PT Freeport Indonesia to these regions.
Based on the agreement, Papua and Mimika together will have rights over 10 percent of the shares of PT Freeport Indonesia after the divestment.
The agreement is one of the strategic and advanced steps related to the divestment after the principal agreements were struck between the Indonesian government and PT Freeport Indonesia on August 27, 2017.
Reported by Satyagraha
(H-YH/INE)
EDITED BY INE/B003
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6) Batik Air to launch Surabaya-West Papua route on Jan. 19
Jakarta | Fri, January 12, 2018 | 05:49 pm
Batik Air is set to open a new route for flights between Surabaya and West Papua on Jan. 19.
Flights heading toward West Papua will depart from Juanda International Airport and land at Domine Eduard Osok Airport in Sorong, where a separate flight heads to Rendani Airport in Manokwari as part of the new route, as reported by Kompas Travel.
“With this new flight route, we hope to respond to our loyal Batik Air passengers and serve them for holidays [and] business or family visits with a premium class flight that offers more comfort,” said Ramaditya Handoko of Lion Air Group's corporate communications division in a press release.
The Batik Air flight from Surabaya to West Papua will fly once a day, departing from Surabaya at 5:00 a.m. WIB and arriving in Sorong at 11:00 a.m. WIT. The flight from Sorong to Manokwari takes off at 11:00 a.m. and arrives at 11:55 a.m. WIT.
The flight to Surabaya takes off from Manokwari at 12:40 p.m. and lands in Sorong at 01:35 p.m. In Sorong, the flight takes off at 2:15 p.m. WIT and arrives in Surabaya at 03:30 p.m. WIB.
For the route, Batik Air will operate an Airbus A320-200 CEO with 12 business class seats and 144 economy class seats, in addition to its Boeing 737-800 and Boeing 737-900 airplanes.
In 2018, the airline aims to add eight more Airbus A320-200 CEO for its domestic and international routes. (asw)
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