JAKARTA (Reuters) – Indonesia plans to acquire Rio Tinto’s 40 percent participating stake in the Grasberg copper mine operated by the local division of Freeport-McMoRan Inc, part of government plans to control more of the country’s resources.
Under a joint venture formed in 1996, Rio has a 40 percent interest in Freeport’s Grasberg contract, entitling it to 40 percent of production above specific levels until 2021 and 40 percent of all production after 2022. Phoenix, Arizona-based Freeport said in August it would divest 51 percent of PT Freeport Indonesia to the Indonesian government, to meet local ownership rules.
Indonesia plans to complete the acquisition of Rio’s interest in the mine in 2018, as part of a purchase of a 51 percent stake in Freeport Indonesia by the Ministry of State-Owned Enterprises (SOE) and other government units, Energy and Mineral Resources Minister Ignasius Jonan said on Tuesday.
Indonesia’s proposal could see the sale of Rio’s interest in Grasberg make up the lion’s share of that deal, provided all parties can agree the structure and price, Jonan said.
”The government will buy Rio Tinto’s 40 percent participating interest in PT-FI,“ Jonan said. If this is fully converted to shares, Freeport agrees if Rio Tinto is willing to sell to the government of Indonesia,” he added.