Freeport Indonesia considers IPO

The Indonesian subsidiary of US mining giant Freeport-McMoRan is considering launching an initial public offering (IPO), its head said in comments published Wednesday. "We are considering several options, including an IPO," Freeport Indonesia president Rozik Soetjipto was quoted as telling the Jakarta Globe newspaper. "The IPO would be good for Freeport Indonesia," he said, adding that it would make the company "more accountable and transparent." He did not specify details such as the timeframe or size of the sale. US-based Freeport-McMoran Copper & Gold, which owns a 90.64 percent stake in the Indonesiansubsidiary, would still have the final say on the matter, he added. Soetjipto said Freeport, whose huge Grasberg mine in restive Papua province was hit by a violent strike last year, was focused on renegotiating its contracts ending in 2021 with the government, the report said. Freeport Indonesia was not immediately available for comment about the report. Indonesia in March announced a new law limiting foreign ownership in the mining sector from 80 percent to less than 50 percent, in a bid to protect abundant natural resources and keep a larger portion of revenues. The regulation, which applies to new contracts only, obliges foreigners to divest at least 51 percent of their shares to Indonesians over a 10-year period. It is not clear how the law may affect Freeport's Indonesian operation. Indonesia, Southeast Asia's largest economy, has some of the world's biggest untapped mineral reserves, including tin, nickel, copper and gold. Foreign direct investment in Indonesia hit a record $20 billion last year, with $3.6 billion attributed to the mining sector. Freeport says it is the single biggest taxpayer to the Indonesian government. Grasberg, the world's biggest gold and second-biggest copper mine, is Freeport Indonesia's only mine, employing more than 20,000 people. A three-month strike over wages and work conditions last year turned violent, with at least eight people killed in ambush attacks and clashes with police. The strike ended in December.