PHOENIX--(BUSINESS WIRE)--
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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20180928005162/en/
Freeport-McMoRan Inc.
Financial Contacts:
Kathleen L. Quirk,
602-366-8016
or
David P. Joint, 504-582-4203
or
Media
Contact:
Linda S. Hayes, 602-366-7824
Source: Freeport-McMoRan Inc.