With a stake sale of gold miner Newmont Nusa Tenggara in limbo, the government has set its eyes on the divestment in 2013 of another company controlled by foreigners — Indonesia Asahan Aluminium (Inalum).
Government Investment Center (PIP) will try to buy all of the shares Inalum offered. After PIP purchases the shares in Inalum, the government will open bidding for domestic companies that want to be involved in the Indonesia-Japan joint venture
The government’s involvement in Inalum, through PIP, is part of the state’s effort to boost revenue from companies engaged in mining industries by closely guarding governance.
Inalum was set up in 1978 under a build, own and transfer contract, which expires in 2013. Tokyo-based Nippon Asahan Aluminium, or NAA, controls 58.9 percent, valued at $726 million, with the Indonesian government owning the remainder.
The government has presented two ownership options for Inalum — that the government take 100 percent of the company, or that it would take a majority stake and NAA could continue as a minority partner. Inalum’s output of 230,000 tons of aluminum a year accounts for 40 percent of total domestic production. About 70 percent of Inalum’s output is exported to Japan.
The provincial government of North Sumatra, where Inalum is located, has expressed interest in the divested shares, local media reported. It has been in talks with nine district governments to form a consortium that would take over the Japanese share.
Last month the government offered a combined quarter of a 7 percent stake in Newmont Mining’s NNT to the local administrations in the region where the firm’s lucrative copper and gold mine is located. Under a 1986 working contract, NNT was required to divest 51 percent of its shares to Indonesian entities by 2010. Much of the NNT’s divestment debate centered on the regional and local administrations vying for the 7 percent stake, which is valued at $246.8 million. Domestic companies own 44 percent of the miner’s Indonesian unit.
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