Indonesian state-owned PT Indonesia Asahan Aluminium (Persero), or Inalum, is nearing a deal on bank financing to fund the acquisition of a controlling stake in Freeport-McMoRan Inc.'s PT Freeport Indonesia unit, Reuters reported March 21.
Earlier in March, Indonesian President Joko Widodo directed his administration to complete negotiations for the Grasberg stake by the end of April.
In August 2017, Freeport agreed to divest a 51% interest in its local unit, which operates the giant Grasberg copper mine in the country, in exchange for an extension to its operating permit for the Grasberg mine beyond 2021.
Inalum CEO Budi Gunadi Sadikin said the company has lined up banks for the transaction and it expects to reach an agreement "very, very soon."
The Indonesian government is also in talks to acquire Rio Tinto's 40% participating stake in the asset. The mining major is entitled to 40% of Grasberg's copper production above specific levels until 2021 and 40% of all production after 2022.
Sadikin, however, denied a report by The Kontan daily, which cited sources as saying that Inalum offered US$550 million for Rio Tinto's Grasberg interest. The report added that the offer was based on a valuation by Morgan Stanley, PricewaterhouseCoopers and Danareksa.
"The price won't be too far from the market price," said Sadikin, adding that the discussions are ongoing but the two sides have set a price range.