For Widodo, seeking reelection next year, getting a majority stake in the mine for Indonesia would be a political boon.
The deal, which would give Indonesia and state-owned miner PT Inalum a 51.23 percent stake in PT Freeport Indonesia, aims to end years of wrangling over ownership rights to Grasberg, the world’s biggest gold and second-biggest copper mine.
But a series of planned transactions worth $3.85 billion is still subject to Inalum securing a special permit for the mine, which requires environmental clearance relating to its waste disposal, and other regulatory issues.
Papua last week rejected the proposed ownership structure for the stake under which the province would indirectly own 10 percent of Freeport’s local unit, potentially delaying the deal.
“I ask that all stages of the divestment process can be finished and final (and) we hope that before the end of 2018 everything is completed,” Widodo told a meeting with Inalum, Papua Governor Lukas Enembe and other government officials.
The president had also requested details on environmental matters, according to a statement on the cabinet secretary’s website.
“We will use (this acquisition) to the maximum extent to improve the welfare and prosperity of the people, primarily the people of Papua,” Widodo said.
According to Enembe, Widodo also demanded the transactions be carried out “very carefully” to prevent intervention by third parties.
Enembe referred to a 2015 scandal linked to Grasberg in which Indonesia’s former parliament speaker was accused of attempting to extort shares worth $1.8 billion from Freeport, as part of the compulsory majority divestment.
“That cannot happen again,” Enembe said in a press release.
Once the deal is completed, Papua should “hold a 10 percent stake and Papua will also have rights regarding Freeport’s agenda going forward,” he said.
A spokesman for Inalum confirmed Thursday’s meeting but said he was unable to comment further.
