Freeport McMoRan and RTZ Corp. enter tieup<\/p>\n
JAKARTA (JP): RTZ America Inc. of the United States has given
\npreliminary commitments to investing around US$1.72 billion in
\nthe U.S. Freeport McMoRan Cooper & Gold Inc. for the development
\nof the latter's mining activities in Indonesia.<\/p>\n
Paul S. Murphy, the executive vice president of PT Freeport
\nIndonesia, an affiliate of the New Orleans-based Freeport McMoRan
\nCopper & Gold Inc. told reporters here yesterday that of the
\ntotal $1.7 billion fund, some $875 million will be used to
\nacquire over 18 percent of the outstanding common equity owned by
\nFreeport-McMoRan Inc. (FTX) in McMoRan Copper and Gold Inc.<\/p>\n
\"As you know, around 70 percent of the McMoRan Copper and Gold
\nInc. total equity is owned by FTX and the remaining 30 percent by
\nthe investing public,\" he said.<\/p>\n
In addition to the acquisition, RTZ America has also been
\ncommitted to providing some $850 million for the establishment of
\na new joint venture involving RTZ America, the RTZ Corporation
\nPLC and McMoRan Copper and Gold Inc.for the development of the
\nMcMoRan gold and copper mining in Irian Jaya, he said.<\/p>\n
Within 30 days from now all things related to the cooperation
\nwill be finalized, Murphy added.<\/p>\n
\"RTZ Corporation PLC and RTZ America today signed letters of
\nintent for the acquisition,\" he said<\/p>\n
Under the acquisition scheme, RTZ America will acquire from
\nFTX some 21.5 million shares of McMoRan Copper and Gold Inc.'s
\nClass A common stock, or 10.4 percent of its outstanding common
\nequity, amounting to $450 million, he said.<\/p>\n
McMoRan Copper and Gold Inc. said in a report made available
\nat The Jakarta Post yesterday that FTX will call its 6.55 percent
\nconvertible subordinated notes, the outstanding principal amount
\nof which is around $373 million. \"If requested by FTX, RTZ
\nAmerica will make a cash tender offer for the notes,\" the report
\nquoted RTZ's chief executive Robert Wilson as saying.<\/p>\n
Joint venture<\/p>\n
Murphy said that under the deal on the establishment of a
\njoint venture, RTZ America through its existing subsidiaries will
\nacquire a 40 percent beneficial interest in the contract of work
\n(COW) held by McMoRan Copper and Gold Inc.'s subsidiaries,
\nincluding Freeport Indonesia and Eastern Mining Company, in Irian
\nJaya as well as another 40 percent beneficial interest in the
\nportion of Freeport Indonesia's COW in Block B in Irian Jaya.<\/p>\n
\"The remaining 60 percent of the beneficial interests will be
\ncontrolled by McMoRan Copper and Gold Inc.,\" he said.<\/p>\n
Freeport Indonesia now holds a mining concession, called Block
\nA in a 10,000 hectare area and Block B at some 2.6 million
\nhectares in size, all located in Irian Jaya.<\/p>\n
From its Block A area, it has been capable of producing 70,000
\ntons of ore per day with a metal equivalent to 750,000 pounds of
\ncopper and 650,000 ounces of gold.<\/p>\n
He said that for future expansion projects in Block A, RTZ's
\nsubsidiaries will provide up to $750 million for 100 percent of
\ndefined costs to help develop such projects.<\/p>\n
\"It is also possible for the local companies in Indonesia to
\njoin the venture in the future,\" he told the Post.<\/p>\n
Smelter<\/p>\n
Earlier on Monday, James R. Moffett, Chairman and Chief
\nExecutive Officer of Freeport MacMoRan Copper and Gold Inc.,
\ntogether with two other equity partners, signed a joint statement
\nwhich confirmed their respective role in the Gresik copper
\nsmelter project.<\/p>\n
Freeport owns 20 percent, Fluor Daniel Inc. 10 percent and
\nMitsubishi Materials Corp. 70 percent of the copper smelter
\nproject in East Java which will begin construction later this
\nyear.<\/p>\n
The plant will have an annual capacity of 200,000 tons of
\ncopper cathode which at present has to be imported to meet
\ndomestic consumption.<\/p>\n
In addition, the smelter will also make 600,000 tons of
\nsulphuric acid as a byproduct which will be supplied to the
\nnearby state-owned Petrokimia Gresik plant. (fhp\/vin)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/freeport-mcmoran-and-rtz-corp-enter-tieup-1447893297",
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"sponsor": "Okusi Associates",
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