NUSA DUA, Indonesia (Reuters) – Freeport-McMoRan Inc’s (FCX.N) divestment of a controlling interest in Indonesia’s Grasberg mine is still planned for 2018, even though the price and some contract terms are still to be agreed, the head of state mining holding company PT Inalum said.
Inalum, which is arranging funding for the deal, already has a “committed” loan for the transaction with Freeport and Rio Tinto (RIO.AX) for the majority stake in Grasberg, Inalum’s Budi Gunadi Sadikin told a briefing on Tuesday, on the sidelines of the Coaltrans Asia conference in Bali.
Indonesian President Joko Widodo had instructed his administration to complete negotiations to buy a majority stake in the world’s second-biggest copper mine by end-April.
This includes buying Rio Tinto’s participating interest, which entitles it to a 40 percent share of all production after 2022, and converting that holding into shares in the mine.
But Freeport said last month that new environmental demands from Indonesia’s government on managing mine waste could delay a new contract for its massive Grasberg copper mine, and in turn could throw the timing of divestment into question.
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