COPPER: Larger share of Grasberg to cost Inalum $3.9B

[caption id="attachment_1003723962" align="aligncenter" width="499"] The government is in and Rio Tinto is out of the Grasberg operations in a deal worth $385 billion. (Image: Reuters)[/caption] INDONESIA – There is now a non-binding heads of agreement covering the Grasberg copper mine in Papua state. When the details are worked out it will be signed by Freeport-McMoRan, Rio Tinto, the PT-FI joint venture, and state-owned Inalum. Inalum will pay a total of $3.85 billion (all figures are U.S. dollars) in cash to increase its participation in Grasberg. The company will receive a 40% interest in PT-FI and all of Freeport’s PT Indocopper investment company that owns 9.36%. That will raise Inalum’s share of the PT-FI to 51%. Freeport will retain 49% of PT-FI. In return, Freeport will receive $350 million for its interests. The remaining $3.5 billion will be paid to Rio Tinto for its share of PT-FI. In addition, Rio will forego, in favour of Freeport, its share of the joint venture cash flows since Jan. 1, 2018, through closing. The deal is expected to close during the second half of this year, subject to the negotiations of certain agreements as well as regulatory and shareholder approvals. More information about the Grasberg operation is available at Freeport’s website www.FCX.com.