Buying into Freeport

Kompas – July 11, 2018
Buying into Freeport

In its rush to acquire a 51% majority ownership in the PT Freeport mine in West Papua before next year’s presidential election – driven by President Widodo’s desire to tout his success in wresting control of the nation’s prized natural resources from foreign ownership – the government is now fending off criticism over the US$3.85 billion price tag it will have to pay.

Critics have questioned the acquisition of the world’s second-largest copper and gold mine, asking why the government didn’t just wait until Freeport’s current contract ended in 2021, by which time it could simply take over the mine without paying a single rupiah.

In response to the criticisms, Finance Minister Sri Mulyani Indrawati, one of the key figures involved in finalising the purchase, personally come forward to defend the deal arguing that Freeport’s previous work contract stipulated that the government would extend the company’s contract after it ended in 2021, although this only left people asking why, if the company was going to end up in government hands anyway, would Freeport be seeking any kind of contract extension at all.