Freeport-McMoRan Inc. (NYSE: FCX) announced today that it has
entered into a Divestment Agreement on previously agreed economic
terms with the Indonesian state-owned enterprise PT Indonesia
Asahan Aluminium (Persero) (Inalum) in connection with Inalum’s
acquisition of shares of PT Freeport Indonesia (PT-FI).
As previously reported, Inalum will acquire for cash
consideration of $3.85 billion all of Rio Tinto's interests
associated with its Joint Venture with PT-FI (Joint Venture), and
100 percent of FCX's interests in PT Indocopper Investama (PT-II),
which owns 9.36 percent of PT-FI.
Under the terms of the Divestment Agreement, the Rio Tinto
interests will be merged into PT-FI concurrent with Inalum’s
acquisition in exchange for a 40 percent share ownership in PT-FI.
The arrangements provide for FCX and existing PT-FI shareholders to
retain the economics of the revenue and cost sharing arrangements
under the Joint Venture. Following completion of the transactions,
PT-FI will have an expanded asset base to include the Rio Tinto
interests and Inalum's share ownership will be 51.2 percent of
PT-FI (subject to a dividend assignment mechanism to replicate the
Joint Venture economics), and FCX's ownership will be 48.8
percent.
Richard C. Adkerson, Vice Chairman of the Board, President
and Chief Executive Officer, said, "We are pleased to announce
definitive agreements for Inalum’s acquisition of shares in PT
Freeport Indonesia. This step marks another significant
milestone toward establishing a new long-term partnership with the
Republic of Indonesia to provide long-term stability for PT
Freeport Indonesia's operations. We look forward to a
mutually positive and beneficial partnership with Inalum that will
continue to provide substantial benefits to the people of Papua;
the Republic of Indonesia; and to local employees, suppliers and
contractors while generating attractive returns for our
shareholders."
At closing, Rio Tinto will receive $3.5 billion, and FCX will
receive $350 million, in cash proceeds.
Following completion of the transaction, FCX expects its share
of future cash flows of the expanded PT-FI asset base, combined
with the cash proceeds received in the transaction, to be
comparable to its existing share of future cash flows under the
current Joint Venture arrangements. FCX will continue to manage the
operations of PT-FI.
The transaction, which is expected to close by the first quarter
of 2019, is subject to certain conditions including, the extension
and stability of PT-FI's long-term mining rights through 2041 in a
form acceptable to FCX and Inalum, resolution of environmental
regulatory matters satisfactory to the Indonesian government, FCX
and Inalum, various other Indonesian regulatory actions and
approvals, and customary approvals from international competition
authorities.
FCX is a leading international mining company with headquarters
in Phoenix, Arizona. FCX operates large, long-lived, geographically
diverse assets with significant proven and probable reserves of
copper, gold and molybdenum. FCX is the world’s largest publicly
traded copper producer.
FCX’s portfolio of assets includes the Grasberg minerals
district in Indonesia, one of the world’s largest copper and gold
deposits; significant mining operations in the Americas, including
the large-scale Morenci minerals district in North America and the
Cerro Verde operation in South America. Additional information
about FCX is available on FCX’s website at “fcx.com.”
Cautionary Statement Regarding Forward-Looking
Statements: This press release contains forward-looking
statements, which are all statements other than statements of
historical facts such as expectations related to the pending
transaction, including, but not limited to, FCX’s share of future
cash flows of the expanded PT-FI asset base, replication of
economics of the revenue and cost sharing arrangements under the
Joint Venture pursuant to a dividend assignment mechanism, FCX’s
continued management of PT-FI’s operations, and the expected timing
of completion of the transaction. The words “anticipates,” “may,”
“can,” “plans,” “believes,” “estimates,” “expects,” “projects,”
“targets,” “intends,” “likely,” “will,” “should,” “to be,”
”potential" and any similar expressions are intended to identify
those assertions as forward-looking statements.
FCX cautions readers that forward-looking statements are not
guarantees of future performance and actual results may differ
materially from those anticipated, expected, projected or assumed
in the forward-looking statements. Important factors that can cause
FCX’s actual results to differ materially from those anticipated in
the forward-looking statements include, but are not limited to, the
outcome of the negotiation and documentation of definitive
agreements providing for the extension and stability of PT-FI's
long-term mining rights through 2041 in a form acceptable to FCX
and Inalum, the Indonesian government’s issuance of an IUPK to
replace PT-FI’s Contract of Work, assurances or approval by
Indonesian tax authorities with respect to the pending transaction,
including confirmation of the withholding tax treatment,
satisfactory to FCX and Inalum, resolution of environmental
regulatory matters, including amendments to the decrees imposing
unattainable environmental standards on PT-FI, pending before
Indonesia’s Ministry of Environment and Forestry satisfactory to
the Indonesian government, FCX and Inalum, various other Indonesian
regulatory actions and approvals, obtaining customary approvals
from international competition authorities, obtaining an extension
of PT-FI’s temporary IUPK after September 30, 2018, and other
factors described in more detail under the heading “Risk Factors”
in FCX's Annual Report on Form 10-K for the year ended December 31,
2017, filed with the U.S. Securities and Exchange Commission (SEC)
as updated by FCX’s subsequent filings with the SEC.
Investors are cautioned that many of the assumptions upon which
FCX's forward-looking statements are based are likely to change
after the forward-looking statements are made, including for
example commodity prices, which FCX cannot control, production
volumes and costs, some aspects of which FCX may not be able to
control. Further, FCX may make changes to its business plans that
could affect its results. FCX cautions investors that it does not
intend to update forward-looking statements more frequently than
quarterly notwithstanding any changes in its assumptions, changes
in business plans, actual experience or other changes, and FCX
undertakes no obligation to update any forward-looking
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20180928005162/en/
Freeport-McMoRan Inc.Financial Contacts:Kathleen L. Quirk,
602-366-8016orDavid P. Joint, 504-582-4203orMedia Contact:Linda S.
Hayes, 602-366-7824
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