Mining Global

An Indonesian state-owned enterprise has acquired a majority stake in a copper, gold and molybdenum joint venture in a multi-billion-dollar deal.

Inalum will acquire for cash consideration of $3.85bn all of Rio Tinto’s interests associated with its joint venture with PT Freeport Indonesia (PT-FI) and 100% of Freeport McMoRan’s (FCX) interests in Indocopper Investama, which owns 9.36% of PT-FI.

Through the agreement, Rio Tinto’s interests will merge into PT-FI concurrent with Inalum’s acquisition in exchange for a 40% share ownership in PT-FI. PT-FI will have an expanded asset base to include the Rio Tinto interests and Inalum’s share ownership will be 51.2% of PT-FI (subject to a dividend assignment mechanism to replicate the Joint Venture economics), and FCX’s ownership will be 48.8%

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits.

Rio Tinto will receive $3.5 billion, and FCX will receive $350 million, in cash proceeds.