Deal for higher govt stake in Freeport near completion, minister says

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Deal for higher govt stake in Freeport near completion, minister says

File - A PT Freeport Indonesia (PTFI) worker is seen in an underground mine. In 2023, PTFI produced 1.65 billion pounds of copper and 1.97 million ounces of gold. (ANTARA/HO-PTFI/am.)

Jakarta (ANTARA) - Indonesian Investment Minister Bahlil Lahadalia announced that the negotiations with mining company PT Freeport Indonesia (PTFI) have reached a 98 percent agreement, including the addition of government shares.

"I have been negotiating with Freeport, and nearly 98 percent of the points have been settled," he said in Jakarta on Friday.

Bahlil said that the government seeks to maximize state income by increasing its stake in PTFI to 61 percent from 51 percent. Consequently, the government has negotiated to extend the company's mining permit until 2061.

He also stated that the government aims to prevent a revenue decline due to PTFI's anticipated production decrease post-2035. Bahlil noted that Freeport, valued at over US$20 billion, is currently engaged in underground mining, with peak production expected in 2035.

"After that, a production drop is predicted, while underground exploration requires a 10–15-year timeframe," he remarked.

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Bahlil said that his ministry is also focusing on negotiations to build smelters in Papua and increase local entrepreneurs' involvement in managing PTFI's mines. PTFI has invested US$3 billion in constructing a smelter in Gresik, East Java, with a capacity of 60 tons of pure gold and 400,000 tons of copper cathode, set to commence operations on July 1.

Bahlil warned that without proactive measures, the reserves will cease to be viable for production by 2035.