Indonesia to take controlling stake in massive gold, copper mine

Indonesia will take a controlling stake in one of the world's biggest gold and copper mines for USD 3.85 billion, the government said today, as it moves to claw back control of the country's vast natural resources.

State-owned mining firm Inalum will get a 51 per cent interest in the Grasberg mine, from just under 10 per cent now, Jakarta said.

The agreement requires US-based Freeport-McMoRan to cede its ownership stake, but it will keep operating the huge complex in the jungles of Indonesia's Papua province, officials said.

Anglo-Australian mining giant Rio Tinto is also selling its interest in the mine as part of an agreement that the government said it hopes to finalise before the end of the year.

Freeport and other foreign firms operating in Indonesia have been ordered to comply with new mining ownership rules designed to give the country more control of its plentiful resources.

The announcement comes after more than a year of see-saw negotiations about the future of Freeport's operations in the Southeast Asian nation.

The company and Indonesia's government have sparred over the ownership structure of Grasberg and its social and environmental impact, including how the firm manages mine waste known as tailings.

"Today is a very positive and important step," Freeport chief executive Richard Adkerson told a press briefing held to announce the deal. "We have worked very diligently over these past months to meet president Widodo's instruction to us to find a win-win solution."