REPUBLIKA.CO.ID, JAKARTA -- Energy and Mineral Resources (ESDM) Minister Ignasius Jonan said the 51 percent stake to be divested by Freeport Indonesia, is worth around US$4 billion.

Freeport Indonesia, a subsidiary of U.S. mining giant Freeport-McMoRan Inc, has agreed to divest up to 51 percent of its shares to Indonesia in exchange of extension of its contract, which will expire in 2021, until 2041.

Jonan said Freeport McMoran (FCX) is valued at US$20.74 billion in New York Stock Exchange and Freeport Indonesia is about 40 percent of the total value.

The Minister told lawmakers at a meeting with Commission VII of the House of Representatives here on Monday 40 percent of the US$20.74 billion is about US$8 billion.

The government, therefore, has to be ready with around US$4 billion to pay for the majority 51 percent share of Freeport Indonesia, which has large copper and gold mines in Grasberg, Papua, the world's second largest copper mine, he said.

As for who is in control, Jonan said, it is still in the process of discussion, but from the beginning it has been a commitment that the mining work is to be handled by Freeport McMoRan, but the management or regulations is under the government.

He said the decision to extend the operating license of Freeport is to be granted only if the conditions set by Indonesia has been accepted including the divestment of up to 51 percent of the Freeport shares and the commitment to building a smelter and that the state revenues must be larger.

The strategy concerning technical matters would be discussed behind closed door by the government, he said.

Earlier Jonan said the government has reached an agreement with Freeport-McMoRan Inc to allow the U.S. miner to apply for a permit to keep operating its giant Grasberg copper and gold mine in the country, but the method of divestment is still unresolved.

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