JAKARTA. The formation of the mining state owned enterprises (SOEs) has almost done. The holding would be mandated to control the Government of Indonesia's shares in PT Freeport Indonesia (PTFI) that amount to 9,36% of the total shareholders of PTFI. Subsequently, the holding would be mandated to take over 51% of the shares.

To date, PT Indonesia Asahan Aluminium as the parent company of the holding is waiting for the Government Regulation to manage each transaction, on the grounds that the management of the government's shares in the mining companies, such as PT Timah Tbk, PT Antam Tbk and PT Bukit Asam Tbk as the public company requires some technical requirements. Previously, the government has issued the Government Regulation No. 72/2016 on the Procedure of the State Capital Participation and Administration in the SOE and the Limited Company.

The Special Staff of the Minister of Energy and Mineral Resources (BUMN) Budi Gunadi Sadikin said, the mining holding will have the financial ability to absorb 51% of PTFI's shares. Budi said, the government may want to seek loans to rise funds to acquire the shares. However, (the holding) can secure the financial needs if the balance sheets (of the SOEs) are being combined.

However, Budi said that the government is not necessarily to fully control the 51% of the shares. In this case, the government may want to find other options to control the shares, such as by offering a joint venture scheme to other entities.

The establishment of the holding aims at strengthening the capital structure and the ability of each subsidiary to control Indonesia's mineral reserves.

The holding also aims at accelerating the down-streaming of local products and contents to enlarge Indonesia's economic size from the mining sector. This also will upgrade the image of Indonesia's mining companies at the global level.

Therefore, according to Budi, it is impossible for Indonesia to acquire Freeport without the holding company. Understandably, Indonesia needs a company with a higher capacity than Freeport to acquire the US-based company. "The mineral reserves can be obtaining either by the acquisition or by the exploration," he said.

Editor: Barratut Taqiyyah Rafie