Indonesia to Purchase Rio Tinto’s Stocks of Grasberg

SHANGHAI, Dec.6 (SMM)－Indonesian government said on Tuesday, it is planning to purchase Rio Tinto’s stocks of copper mine Grasberg, which is operated by US Freeport－McMoRan CopperGold Inc. This action can probably resolve a protracted issue among three parties. As per the joint-venture company built in 1996, Rio Tinto holds 40% stocks of Graberg and enjoys certain output and 40% output expect that certain amount until 2021. After 2022 it will enjoy 40% of total output of this mine.

In order to meet new regulation of ownership of Indonesian government, Freeport agreed to strip 51% stocks of its Indonesian subsidiary to Indonesian government.

Christopher LaFemina, Jefferies analyst says this agreement is probably a three-win result for Freeport, Rio-Tinto and Indonesian government because the value loss of Freeport is less than anticipation, Rio-Tinto can exit from a non-core business with high risk and Indonesian government will possess most stocks of Grasberg.

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