Indonesia's plan to establish a holding company for state-owned miners could create a new giant with Rp 90 trillion ($6.6 billion) in assets, putting the miners in a better position to raise new funding to manage the country's natural resource wealth.
Under the plan, which has been brewing for more than a year now, the government would turn state-owned Indonesia Asahan Aluminium (Inalum) – the country's largest aluminum producer – into a holding company for its peers, including gold miner Aneka Tambang, coal miner Bukit Asam and tin miner Timah.
"[The assets] will be around Rp 90 trillion. It will be used to better manage our mineral and coal resources," Inalum president director Budi Gunadi Sadikin said on Wednesday (22/11), as quoted by Antaranews.com.
State-Owned Enterprises Minister Rini Soemarno said earlier that the holding structure would benefit the miners, making it easier for them to obtain loans because the total assets under the holding company will serve as leverage.
This would also alleviate the government's burden of having to inject capital into these companies when they need to expand, Rini said.
Still, the new holding company will not be the largest mining entity in Indonesia. Freeport Indonesia, the local arm of United States-based miner Freeport McMoRan, had assets worth $11.1 billion as of June this year. The company operates Grasberg, Indonesia's largest gold and copper mine, in Papua.
The world's top three miners, including Glencore, BHP (formerly known as BHP Billiton) and Vale, reported assets worth $128 billion, $119 billion and $99 billion, respectively, in 2016.
Inalum has set a long-term goal to be among the world's top 12 largest mining companies, from below 50 currently, which means the company has to double its assets, Budi said. The government said earlier that Inalum would be the entity that acquires the remaining 40.64 percent stake that will become available as a result of Freeport Indonesia's divestment.
Fajar Harry Sampurno, deputy for mining business, strategic industries and media at the State-Owned Enterprises Ministry, said Aneka Tambang, Bukit Asam and Timah will hold an extraordinary general shareholder meeting on Nov. 29 to approve the transfer to Inalum of the majority of the shares, currently held directly by the government.
Inalum is wholly owned by the government after the latter bought out 58.8 percent of the company's shares from Nippon Asahan Aluminium, a consortium of 12 Japanese firms, in 2013.
Source : Jakarta Globe
22 November 2017