Indonesia plans to restrict the sale of a 10.6 percent stake in the local unit of Freeport-McMoRan, the world's biggest publicly traded copper producer, to local investors, the Jakarta Globe reported. The Elizabeth, New Jersey, company is selling the stake in Freeport Indonesia as part of a deal with the government to extend its contract to operate a copper and gold mine in Papua province.
The Indonesia Stock Exchange and the Financial Services Authority are drafting the restrictions, which would allow foreigners to buy the shares "after a couple of years," the Globe said, citing stock exchange director Tito Sulistio. He said he believed local investors including two state pension funds would welcome the plan.
Reuters earlier reported that Rini Soemarno, minister of state-owned enterprises, said that miner Aneka Tambang or aluminum producer PT Inalum should buy the stake. Aneka Tambang is willing to buy the stake but would need some outside funds to do so, its chief executive, Tedy Badrujaman, said, Reuters reported Oct. 21.
Neither media report gave an estimate of the value of the shares.
Freeport-McMoRan plans to spin off its oil and gas business under pressure from shareholders such as activist investor Carl Icahn, according to Bloomberg. It's also reduced the size of its board, while appointing two Icahn nominees to it. Freeport McMoran is trading at about a third of its price in mid-2014, after $9 billion in oil and gas investments in 2013 turned sour amid a drop in oil prices.