JAKARTA-PT Indonesia Asahan Aluminium, or Inalum, got the mandate Friday to buy a 41.64% stake in the local unit of Freeport-McMoRan Inc., but the two parties haven't reached an agreement on the value of the stake.
The move will increase the state-owned company's ownership to 51% from 9.36%, which is currently held by the government.
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After years of negotiation, the U.S. mining company agreed in August to reduce its ownership in PT Freeport Indonesia, which operates the Grasberg copper and gold mine in the country's easternmost province of Papua, to 49% from 90.64% currently.
Freeport's share sale a requirements Jakarta demanded to extend the company's mining permit until as long as 2041.
"The share acquisition will be done through corporate mechanism so that it won't burden the government's budget," Finance Minister Sri Mulyani said.
Budi Gunadi Sadikin, Inalum's chief executive, said the company will raise funds for the acquisition, but didn't elaborate.
A Freeport Indonesia spokesman, Napoleon Sawai, said last month that Jakarta values the stake at $4 billion, while the U.S. company values it between $12 billion and $13 billion.
Freeport plans to invest as much as $20 billion through 2041 to mine underground, shifting from what had been largely open-pit mining since the 1970s.
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(END) Dow Jones Newswires
January 12, 2018 03:54 ET (08:54 GMT)