JAKARTA (Reuters) – For many Indonesians, investment banker-turned-minister Ignasius Jonan is the man who made trains run on time.
Months after being handed the mining portfolio, the minister notched up a bigger victory; securing majority local ownership of Grasberg – one of the world’s biggest gold and copper mines – following months of difficult negotiations with U.S. giant Freeport-McMoRan Inc.
Foreign control of mines has been sore point for many Indonesians, who view it as a legacy of an authoritarian past when a ruling elite cut sweetheart deals to carve up precious resources.
The framework agreement with Freeport on Aug 29 was seen as a victory for Indonesia and a political win for President Joko Widodo as the U.S.-based company agreed, among other measures, to cut its mine ownership from more than 90 percent to below 50 percent in favor of Indonesian owners.
The deal showed other multi-nationals in the sector Jakarta intended to wrestle back mine ownership, part of the motivation behind a mining law introduced in 2009 that targets the replacement of mining contracts with a new mining permit system, scaling back miners’ legal rights over their operations.
Jonan, Freeport Indonesia and Freeport McMoRan declined to comment for this story.
The 54-year-old Jonan knew little about the resources sector when he took the mines portfolio, but Widodo saw the qualities he needed to lead the negotiations – a brash but principled negotiator with resolve to get the job done. The former banker had overhauled the state rail company, expanding and improving the Dutch colonial-era rail network, including its time keeping.