Rio Tinto in talks to sell Grasberg stake to Indonesian government, Freeport CEO says

Rio Tinto is in preliminary talks to sell its stake in the Grasberg mine to the Indonesian government, according to the chief executive officer of Freeport-McMoRan.

The US company, which operates the Grasberg mine through its 90.64%-owned PT Freeport Indonesia (PT-FI) subsidiary, is providing information to assist the sale process but has no control over its outcome, Richard Adkerson said.

“The Indonesian government is in discussions with our joint-venture partner with the potential of acquiring their interest,” Adkerson said during a conference call for its 2017 earnings.

“We are cooperating and helping to facilitate that transaction…That transaction, if it goes ahead, would be the best outcome for everyone, I believe,” he added.

The transaction “appears to be the desire of the parties” and was the “most likely outcome.” Adkerson said

Rio Tinto has a joint venture with Freeport for a 40% share of production above specific levels until 2021, and 40% of all production after 2021.

Freeport is also currently negotiating to divest its stake in PT-FI to give the government a 51% stake.