JAKARTA – Freeport-McMoRan and Indonesia signed an agreement, paving way for the US miner to hand over majority control of the giant Grasberg copper and gold mine to a local State-owned company.
Freeport CEO Richard Adkerson and PT Indonesia Asahan Aluminium president director Budi Gunadi Sadikin signed the sales and purchase agreement in Jakarta on Thursday.
The agreement is the culmination of more than a year of protracted negotiations and a framework deal unveiled in July. The new pact will allow Indonesia to issue a special mining license to Freeport to operate the world’s second-largest copper mine through 2041. State-owned Indonesia Asahan Aluminium, known as Inalum, has agreed to pay $3.85-billion to increase the nation’s stake in the asset to 51% from just over 9% now.
Under the framework agreement Rio Tinto Group will cash out its economic interest in Grasberg for $3.5-billion, leaving Freeport’s share of the payment at $350-million.