Indonesia and Freeport-McMoRan Inc have struck an initial agreement for state-owned mining company PT Inalum to take a controlling stake in Freeport’s local unit, government officials said yesterday, although the final price for the deal remains unclear.
The agreement will give Indonesia control of the Grasberg mine, the world’s second-biggest copper mine, and should cap years of wrangling over the mining rights for the site.
The two sides in August last year agreed to let Freeport keep operating the mine while ceding control.
An initial agreement has been reached for Inalum to increase its stake in Freeport’s local unit to 51 percent from 9.36 percent, Indonesian President Joko Widodo said.
“I think this is a leap forward. We have to have a larger amount of income from tax, royalties, dividends ... so, the value of our mining sector can benefit everybody,” Widodo told reporters.
It was not immediately clear whether a resolution had been reached on how the mine will be managed by Freeport with Indonesia as the majority shareholder.
A Jakarta-based spokesman for Freeport declined to comment.
During Freeport’s five decades of operating Grasberg in Papua Province, there has been frequent friction between the government and the company over revenue sharing, and the mine’s social and environmental impact.
Phoenix, Arizona-based Freeport has been in negotiations with Indonesia to secure long-term operating rights at Grasberg after the government introduced new rules aimed at giving Jakarta greater control over its resources.
Efforts to finalize a deal have been complicated by concerns over the environmental impact of the project.
With presidential elections due next year, sealing a deal to get a majority stake for Indonesia in one of the world’s biggest mining operations is a priority for Widodo, who is widely expected to seek a second term in office.
A deal is also critical for Freeport, as it needs long-term certainty to push forward with the massive investment needed to develop an underground mining phase at Grasberg from the current open-pit construction.
As part of the acquisition deal, Inalum was expected to acquire the 40 percent participating interest in Grasberg held by mining giant Rio Tinto Ltd.
Indonesian Minister of State-Owned Enterprises Rini Soemarno last month said that Inalum was negotiating a price for the package of Freeport acquisitions of “between US$3.5 billion and US$4 billion.”
DEVELOPING TALENT: The electronics contractor is looking to recruit people to work in core tech fields and emerging industries like electric cars and robotics Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has launched a recruitment drive, offering a monthly salary of no less than NT$45,000 (US$1,485) to university graduates. For those with a master’s degree, the starting pay would be NT$52,000 per month at the minimum, while doctorate degree holders would receive at least NT$60,000 a month, Hon Hai said a statement issued early this week. The latest recruitment drive is aimed at attracting talent in core technology fields — artificial intelligence, semiconductors and next-generation mobile communications — and emerging industries — electric vehicles, digital healthcare and robotics, the
NEW CONSIDERATIONS: An airline manager said the idea is tempting, as demand for air cargo is strong, but issues such as training loaders would need to be addressed Taiwanese airlines might repurpose passenger jets to carry cargo in their cabins to offset lost revenue amid the COVID-19 pandemic. Airlines are considering applying to the Civil Aeronautics Administration (CAA) for permission to transport cargo in passenger cabins after StarLux Airlines Co (星宇航空) last month became the first among the nation’s airlines to offer cargo-only flights using the normal cargo holds of its three Airbus SE A321neo passenger jets. “We are considering whether to increase our capacity by putting cargo on passenger seats,” Starlux spokesman Nieh Kuo-wei (聶國維) told the Taipei Times by telephone. “The advantage is that we can improve revenue,
GLOBAL CUTS: CEO Warren East said the firm’s focus was on strengthening financial resilience, so it would likely reduce salary costs by at least 10% this year Rolls-Royce Holdings PLC is scrapping its targets and final dividend to shore up its finances as the British aero-engine maker’s customers around the world ground planes due to the COVID-19 pandemic. Rolls-Royce, one of Britain’s most historic industrial names, which before the pandemic struck was trying to emerge from a multiyear turnaround plan, has suspended its dividend for the first time since 1987. The company’s engines power Airbus SE and Boeing Co’s widebody jets, but more than 60 percent of that fleet is now grounded, according to aviation data provider Cirium. Rolls-Royce is paid by airlines based on how many hours they fly. Over
PAINFUL CONTRACTION: Passenger loads in February on flights between Taiwan and China, Hong Kong and Macau fell by more than 90 percent compared with December Even with more than NT$450 billion (US$14.85 billion) in financial aid from the Executive Yuan’s expanded relief package, local tourism-related businesses are unlikely to rebound from the COVID-19 pandemic any time soon, a central bank report released last month said. The NT$1.05 trillion relief package includes NT$472 billion in financial assistance for tourism and transportation sectors, such as airlines, hotels, travel agencies, taxis and tour buses. However, a March 20 central bank report said that the effects of the COVID-19 pandemic on global and domestic economies are far greater than that of the 2002-2003 SARS epidemic, despite any benefits from delayed purchases