JAKARTA. Indonesia has prepared Rp 40 trillion (US$ 2.96 billion) for acquiring shares in PT Freeport Indonesia, a copper and gold miner in Papua, as the company is required to divest at least 51 percent of its shares as stipulated in the new mining regulation.

The fund, will be used to buy 40.65 percent of Freeport’s shares as it already holds 9.36 percent of the mining giant’s stock.

The government and Freeport have been negotiating several issues including the conversion of Freeport’s contract agreement from a Contract of Work (CoW) to a special mining license (IUPK), the share divestment and concentrate export permit.

For the share acquisition, the government has sourced the funds from the state-owned enterprises’ pension fund (Dapen), Hadi said, adding that the move was in line with the instruction of President Joko “Jokowi” Widodo.

“It is the government, which will be responsible for the fund, not the state enterprises,” said Hadi as reported by tribunnews.com on Thursday, adding that after the divestment the operator of the mining site would still be Freeport.

The divestment requirement is stipulated in Government Regulation (PP) No. 1/2017 on mineral and coal mining.

Speaking about the demand of the Mimika administration for 10 percent to 20 percent of the Freeport shares, Hadi said, it was still in the process of discussion.

Energy and Mineral Resources Deputy Minister Archandra Tahar, however, said Freeport had not agreed on the divestment of its shares.

“We are fighting [to get] 51 percent of the shares]. We can talk later about the demand of the regional administration,” Archandra added. 

Editor: Sanny Cicilia