Monday, September 25, 2023

Government increases ownership as Freeport divests another 20% of shares

Reading Time: 2 minutes
Intelligence Author


Mahinda Arkyasa



The Indonesian government’s efforts to increase share ownership in PT Freeport Indonesia (PTFI) have paid off. Freeport McMoran CEO Richard Adkerson and PTFI CEO Tony Wenas agreed to release another 20 percent stake in the mining company to the government.

In a recent statement, President Joko “Jokowi” Widodo revealed that Freeport is willing to divest 20 percent of its shares for free. As compensation, the government will extend PTFI’s special mining permit (IUPK), which expires in 2041. “The reward is a contract extension after 2041, until 2061,” President Jokowi said on Monday (29/5).

After the divestment occurs, the government, through MIND ID Mining SOE Holding, will become the majority shareholder with 71 percent share ownership. Currently, the composition of PTFI shareholders is dominated by MIND ID at 51 percent, while 49 percent are owned by Freeport McMoran.

MIND ID’s responsibility as majority shareholder

Previously, the government requested that Freeport release 10 percent of its shares to the government as a condition for extending the mining contract. Freeport is willing to provide a larger portion of shares.

However, getting free shares does not mean that MIND ID can simply relax. As the majority shareholder, MIND ID has the responsibility to develop PTFI’s business. Of course, this requires a lot of money. 

As an illustration, PTFI CEO Tony Wenas explained that until 2041, the management of copper and gold mines in Papua will require a substantial investment of up to US$36.6 billion. This significant investment includes various aspects, such as the smelter construction in Gresik, East Java. 

As a result, MIND ID will need to allocate a minimum of US$150 million for the next two decades. 

When comparing the investment cost to the potential dividend payments to the state, it is relatively lower. For instance, PTFI disbursed US$576 million in dividends last year alone.

Furthermore, PTFI  has set a target of US$1.6 billion in dividend payments for this year and the following year, assuming that the copper price remains stable at around US$4 per pound.

PTFI contribution to government’s coffers 

The Investment Minister and Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia has confirmed that the government is highly likely to extend PTFI’s mining contract. 

This decision stems from the company’s impressive performance, prompting the government’s interest in augmenting its shareholding.

In 2022, PTFI generated substantial state revenues of US$3.32 billion, including taxes, dividends, and non-tax state revenue. The government has set a target of US$3.76 billion for state revenue this year.

Alongside increasing its share ownership, the government has also made a request to PTFI: the construction of a copper concentrate smelter in Papua, which serves as a condition for the contract extension.

Intelligence Author


Mahinda Arkyasa




We will provide you with an invoice for your reimbursable expenses.


New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.


$550 USD/Year


$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email

Add keywords to your market watch and receive notification:
Schedule a free consultation with us:

We’ll contact you for confirmation.


International oil companies, Repsol and ExxonMobil Indonesia, are exploring business opportunities in the field of carbon capture and storage (CCS) services within Indonesia’s oil and gas sector. This move aligns with the discovery of favorable carbon storage capacities.
The Minister of Cooperatives and Small and Medium Enterprises, Teten Masduki, revealed that around 70% of the income of the logistics industry has plummeted. Teten suspects that this decline is driven by the influx of illegal textile imports into the country through online or e-commerce platforms.
Entrepreneurs in the geothermal sector have revealed that the growth of installed capacity for geothermal power plants (PLTP) in Indonesia remains sluggish, currently reaching only 40 MW per year. Several challenges are seen as hindrances to the expansion of this clean energy source.
Amman Mineral Nusa Tenggara (AMNT), a subsidiary of PT Amman Mineral Internasional Tbk (AMMN), has entered into a preliminary agreement with PT Pertamina.
The Ministry of Energy and Mineral Resources (ESDM) has announced the offering of Phase III Oil and Natural Gas Working Areas (WK Migas) for the year 2023. These three oil and gas blocks are all located in the Papua region.
Under the umbrella of BUMN Holding Industri Pertambangan MIND ID, one of its members, PT Aneka Tambang Tbk (Antam), has successfully initiated the East Halmahera Feronickel Plant project. This endeavor reached a significant milestone with the inaugural “first metal tapping” process on September 12, 2023.