REPUBLIKA.CO.ID, JAKARTA - The Indonesian government was considering a takeover of tin producer PT Indonesia Asahan Aluminium (Inalum), after the current Japanese ownership contracts expire, Finance Minister Agus Martowardojo said on Friday. "Indonesia has suffered losses for 22 years because of its cooperation with Japan (Nippon Asahan Aluminium), which should not be allowed to extend its contract," Martowardojo said, adding that Inalum must be returned to the Indonesian government once the contract expires.
Indonesia currently holds a 41 percent stake in Inalum, while the remaining majority stake is held by Japan`s Nippon Asahan Aluminium. Martowardojo said the government was yet to take a decision regarding a takeover of Inalum and was considering other options, adding that his ministry could help the government in doing so and that a complete takeover would benefit the government.
He also rejected to speculate whether Inalum would be sold to a state-owned firm once it is acquired by the government. "The important thing is that Inalum should be taken over by the government. Whether it should be given to state-owned firms or to private companies is another matter," he said then added that a fund worth 7 trillion IDR had been set up for buying Inalum shares, but the expenditure had not been included in the 2012 revised state budget yet.
However, Industry Minister MS Hidayat confirmed last week that the government had allocated a budget of around 7 trillion IDR to fund its takeover of Inalum in 2013. The government was currently in the midst of unofficial negotiations to reach a purchase agreement, discuss legalization and the fate of the company`s workers, Hidayat said, adding that an official negotiation would begin in August or September this year.
"As per the master agreement, if we decide to take over or buy the company`s shares, payment as well as negotiations must be concluded exactly a year before the deadline, which falls in October 2013," he noted.
Hidayat added that if the takeover was financed from the national budget, the government would have to first discuss the matter with the House of Representatives. After it gained control of all Inalum shares, the government could nominate a state-owned company to manage Inalum, although no such decision had been taken, he said.