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Freeport maintains Indonesian unit stake sale to be made at 'fair market value'

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Freeport maintains Indonesian unit stake sale to be made at 'fair market value'

The Indonesiangovernment has put a US$630 million price on a 10.64% stake in 's unit, Reuters reportedApril 26.

Freeporthad offered to sell the stake for US$1.7billion in January, but it was rejectedby the government as it was too expensive. The company has now been requested toamend its offer.

"Oncewe reach an agreement on price we can make a timeline," said Sudjatmiko, aspokesman for the country's mining industry.

The divestmentis part of the process to extend Freeport's right to operate the copper-gold mine in thecountry to beyond 2021. The company seeks to spend about US$18 billion for expansionworks at the site.

In anearnings call, Freeport President And CEO Richard Adkerson said the official letterfrom the government did not give a valuation amount.

"Iwant to tell you that in all of our agreements with the government of Indonesia,we have indicated any divestment would be at fair market value. That's consistentwith our contract and that remains our position," Adkerson said.

Meanwhile,Eric Kinneberg, director for external communications at Freeport, told SNL Metals& Mining that the company submitted a valuation report to Indonesian governmentin connection with discussions related to the extension of its and divestment thereunder.

"Inorder to facilitate these discussions, we submitted the valuation report, whichis based on a fair market value analysis of the Grasberg operations in accordancewith the long term rights accorded under the contract of work," Kinneberg said.

"PTFIhas responded to the most recent Government comments by indicating that any transactionfor shares will take place at fair value and in conjunction with the extension ofPTFI's long-term rights provided under its contract," he added.

The U.S.-basedmining giant values its Indonesian copper asset at US$16.2 billion.

Freeportposted a net loss attributableto shareholders of US$4.18 billion, or US$3.35 per share, for the first quarterof 2016, widening from US$2.47 billion, or US$2.38 per share booked a year earlier.