The Indonesian Government represented by the central government, Papua provincial government, Mimika regency government and PT Indonesia Asahan Aluminium (PT Inalum) signed the agreement for shares divestment of PT Freeport Indonesia in the Ministry of Finance.
The agreement was signed by the Minister of Finance, Minister of Energy and Mineral Resources, Minister of State-Owned Enterprises, Governor of Papua, Mimika Regent and General Director of PT Inalum. The agreement was a step forward and strategic in the takeover of divestment shares of PT Freeport Indonesia after the conclusion of understanding between the Indonesian government and PT Freeport Indonesia on 27 August 2017. The agreement is an example of cooperation between the central government, local government and State-Owned Enterprises in the take-over of PT Freeport Indonesia divestment shares.
Based on the agreement, the provincial Papua government and Mimika regency Government will have 10 per cent of PT Freeport Indonesia shares after divestment. The portion of right shares is for the interest of the public over traditional rights and those affected permanently by mining.
The share divestment of PT Freeport Indonesia will be implemented through corporate mechanism so it won’t burden the national and local budget and will be one of the benefits of the creation of a holding company of State-Owned Enterprises for Mining Industry.
The whole divestment scheme will allow the Indonesian government to have 51 per cent of shares. President Joko Widodo has committed the divestment scheme will be transparent, free from vested interest of certain groups and manage accordingly each step of the way.
The government hopes that the 51 per cent ownership will increase state revenues, accelerate the down streaming of the mining industry in order to add value, increase employment opportunity and development in the province. In the end, the taking of the divestment shares will benefit the whole component of the nation, including the people in Papua.
The momentum of this signing will be an important history for the people of Indonesia. The whole divestment process must be securely guarded with national interest in mind, interest of the Papuan people and the sovereignty of the Unitary State of the Republic of Indonesia in managing the natural resources transparently and maintaining conducive investment climate.