Freeport Indonesia submits 12% share divestment draft to government for permit extension

PT Freeport Indonesia (PTFI) has formally submitted a draft agreement for the divestment of 12 percent of its shares to the Indonesian government. This submission is a crucial step toward securing an extension of its Special Mining Business Permit (IUPK), currently slated to expire in 2041.

President Director of PTFI, Tony Wenas, confirmed the submission, stating that the share transfer agreement must be finalized before the IUPK extension can be issued. This divestment is a key component of the Memorandum of Understanding (MoU) regarding the IUPK extension for the Grasberg mine in Central Papua.

The MoU, signed by Indonesian Minister of Investment and Downstreaming Rosan Perkasa Roeslani, Freeport-McMoRan CEO Kathleen Quirk, and Wenas, outlines six main points. Beyond the share transfer, PTFI commits to enhancing its support for local communities in Papua, including funding for a new hospital and two medical education facilities. The company also plans to increase exploration activities and accelerate studies for long-term resource development and expansion opportunities.

Furthermore, PTFI will continue to prioritize domestic downstream processing, selling refined copper and precious metals within Indonesia. The agreement also allows for flexibility in exporting refined copper to the United States based on market demand. As part of the deal, Freeport-McMoRan will retain approximately 48.76 percent ownership until 2041, after which its stake will decrease to around 37 percent starting in 2042, with the government acquiring the remaining 12 percent at no cost, provided they reimburse proportional book value costs for post-2041 benefits.