JAKARTA: Indonesia finalised the transfer of majority control over a giant gold and copper mine from US company Freeport-McMoRan, the government said Friday, in a long-awaited deal that boosts the president’s re-election campaign.

The Phoenix, Arizona-based Freeport McMoRan Copper & Gold Inc. initially owned about 90 per cent of the Grasberg mine since it began operating in Indonesia’s easternmost province of Papua in 1973. The rest has been owned by the Indonesian government.

“Today is a historic moment,” President Joko “Jokowi” Widodo told a news conference at the presidential palace in the capital, Jakarta, attended by related ministers of his cabinet and Freeport-McMoRan chief executive Richard Adkerson.

“We will use this majority ownership entirely for people’s prosperity. Our income in tax, revenues and royalties will be bigger and better,” Widodo said.

The landmark deal worth $3.85 billion to take over a 51.2pc stake in PT Freeport Indonesia from the US company was paid by state-owned PT Inalum mining company after environmental and smelting issues were settled, Widodo said.

The two sides had been on a collision course since a presidential regulation in 2012 imposed a limit of 49pc on foreign ownership of companies issued new mining licenses. Foreign investors with ownership greater than 49pc were required to sell shares to state-owned enterprises or privately owned Indonesian companies.

The mine in Papua, where a separatist movement simmers, has been the target of protests by Papuans who resent the region’s mineral wealth being exploited by the US and Indonesia.

Widodo said people in Papua will also get 10pc of ownership and regional taxes as well.

Apart from reduced ownership, Adkerson said the new permit given to Freeport Indonesia, which is valid until 2031, would give the company clarity over its operation in the country up to 2041 as the company could apply for a 10-year extension within five years before it expires.

Published in Dawn, December 23rd, 2018