7 Mar 2018

Indonesian president wants Freeport purchase talks over by May

7:33 am on 7 March 2018

Indonesia's President is pushing for completion of talks over the purchase of a majority stake in the Freeport mine in Papua before May.

Indonesia's President Joko Widodo (L) arrives at the Association of Southeast Asian Nations (ASEAN) Summit in Vientiane on September 7, 2016.

Photo: AFP

Last August, the American miner Freeport McMoran agreed to divest 51 percent of shares in its Indonesian subsidiary which runs the lucrative mine at Grasberg in Papua province.

This was in exchange for the miner securing long-term operating rights.

Indonesia's government currently owned a less-than-10 percent stake in Freeport Indonesia.

However long-running negotiations over the terms of the divestment have not been finalised.

Reuters reports that President Joko Widodo has instructed his administration to complete negotiations over the purchase of a majority stake in Freeport-by the end of April.

Freeport said in January it was close to a deal with Indonesia for Grasberg, the world's second-biggest copper mine.

However a fair price for the shares has been a sticking point.

Papua province itself has also been seeking a greater share of the mine.

The provincial government last year reportedly secured a ten percent share in Freeport's local operations as part of the divestment package.

Seven percent was to go to Mimika Regency where the Grasberg mine complex is located, while three per cent would go to the provincial government.

Papua's Governor Lukas Enembe confirmed that the new arrangement, having previously complained about the lack of participation by Papuans in the control of Freeport.

For years, the Freeport mine has been Indonesia's largest single source of revenue.

West Papuans have long expressed frustration about the environmental destruction caused by the Freeport mine operations in Mimika regency.

West Papuans have long expressed frustration about the environmental destruction caused by the Freeport mine operations in Mimika regency. Photo: MIneral Policy Institute

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