Antam wants a piece of Freeport

Antam wants a piece of Freeport

The Jakarta Post, Jakarta

The government has officially requested state gold and nickel
miner PT Antam to carry out a due diligence study on the possible
acquisition of a 9.36 percent government stake in giant gold
producer PT Freeport Indonesia.

The publicly listed company would focus on the acquisition of
the government's stake in Freeport rather than a stake of similar
size held by PT Indocopper Investama, Antam said in an emailed
statement.

"Currently, the acquisition of the government's stake appears
more feasible than acquiring both stakes," the firm said in the
statement.

The due diligence process will provide a more detailed
assessment of the share-transfer plan, which could possibly be
done through a cashless transaction, where the government
transfers its shares in Freeport in exchange for newly issued
Antam shares.

"(This scheme) is still at a very preliminary stage and
pending minority shareholder approval," the company said in the
statement.

Antam's president Dedi Aditya Sumanagara previously said that
it would be better for the company to buy Indocopper's and the
government's shares, or 18.72 percent in total.

With a state company controlling the stake, the government
will have the right to place a commissioner on Freeport's board
and gain wider supervision of its activities. It will also get a
bigger share of the profits.

But the provincial administration of Papua, where Freeport
operates its giant gold mine, has also shown an interest in
acquiring the stake owned by Indocopper, which is a subsidiary of
Freeport.

The local unit of U.S. gold giant PT Freeport is obliged to
divest close to 10 percent of its shares to domestic investors.
The central government and the local administration will be given
priority.

Based on market prices, economist-cum-legislator Dradjad
Wibowo has estimated that the stake should be worth some $619
million.

Prices of metals have continued to rise this year, following a
strong surge in 2004. Antam booked Rp 195.6 billion (US$20.27
million) in net profit in the first quarter of 2005, a 33.18
percent increase from Rp 146.9 billion recorded in the same
period last year.