REPUBLIKA.CO.ID,BENGKULU -- The holding company of state-owned enterprises (SOEs) engaged in mining will build a smelter if an agreement is reached with PT Freeport to divest 51 percent of the latter's shares.
"If it works well and Inalum owns a majority stake, then the smelter will be our responsibility," President Director of PT Indonesia Asahan Aluminum (Inalum) Budi G. Sadikin stated here on Wednesday.
The Indonesian government has proposed to Freeport to build a smelter in order to extend its business license in the country.
PT Freeport Indonesia has the potential to increase its holding assets to Rp200 trillion (some US$14.7 billion) if 51 percent of the company's shares are owned by PT Inalum.
"If the divestment goes well, it means that the value of shares of the holding state-owned mining company could increase to around Rp200 trillion," he remarked.
Currently, Sadikin said the divestment process is still in the negotiation phase that involves various parties, including the local administrations. It is expected that the amount of shares can be handled by the mining SOE holding company.
The assets of the state-owned mining holding companies are expected to range from Rp87 trillion to Rp90 trillion ($6.6 billion).
The three members of the state-owned mining companies -- PT Aneka Tambang Tbk, PT Bukit Asam Tbk, and PT Timah Tbk -- will hold a General Meeting of Shareholders on November 29, 2017.
The agenda of the meeting is to amend the articles following the transfer of majority ownership from Indonesia to PT Inalum, which is fully owned by the state.
Earlier, Minister of Energy and Mineral Resources Ignatius Jonan had confirmed that the smelter to be built by PT Freeport Indonesia should not be located in Timika, Papua.
"It does not have to be in Papua, especially in Timika. Considering that this is a huge plant, it should be far from the community, so that pollution and wastes do not affect the people's lives," he said.
Smelter is a processing facility to increase the content of metal, such as tin, nickel, copper, gold, and silver, to reach a certain level that meets the standards as the raw material of the final product.
Jonan asserted that all mining companies operating in Indonesia, including Freeport, are required to build a smelter in the country.
Ikuti Whatsapp Channel Republika