Retail News CRM

Tag: gold mine

  • Indonesia to Sell $4b in Bonds to Fund Freeport Purchase

    Indonesia to Sell $4b in Bonds to Fund Freeport Purchase

    State-owned mining holding company Indonesia Asahan Aluminium, better known as Inalum, sold bonds worth $4 billion in its first-ever US dollar bond deal on Thursday to fund the acquisition of a majority stake in the Grasberg copper mine in Papua.

    The deal came amid choppy global markets, rocked by trade concerns and slowing economic growth in Asia – including Indonesia – that have made it hard for emerging market borrowers to attract investor interest.

    The coupon on the bonds was lower than the initial guidance.

    Inalum sold a tranche of three-year bonds at a yield of 5.230 percent, five-year bonds at 5.710 percent, 10-year bonds at 6.530 percent and 30-year bonds at 6.757 percent, according to a copy of the term sheet for the sale.

    That compared with initial guidance ranging from 5.875 percent to 8 percent.

    Inalum sold $1 billion in three-year and 10-year bonds each, $1.25 billion in the five-year bonds and $750 million in the 30-year paper, according to the term sheet.

    The bonds were sold slightly below face value.

    Inalum will use the funds to buy shares in US mining giant Freeport-McMoRan’s Indonesian unit, which owns the mine.

    Freeport agreed in July to sell its stake to the government for $3.85 billion, ending a long-running dispute with Indonesia, which is seeking to gain greater control over its mineral wealth.

    The sale occurs during a period of market turmoil which has seen Asian issuers hit particularly hard as rising US interest rates have pushed up borrowing costs.

    The sale drew over $20 billion in investor orders, most of them from the United States.

    Asset managers and fund managers represented the bulk of investors, making up 78 percent to 86 percent of buyers.

    The bonds are expected to be rated BAA2 by Moody’s and BBB- by Fitch.

    There is some uncertainty around the Grasberg deal as the government said it is binding while Freeport and Rio Tinto said it is non-binding.

    The bond deal includes a clause that says the bonds will be redeemed at 101 percent of face value if the acquisition is not completed by June 30 next year.

    BNP Paribas, Citigroup and Mitsubishi UFJ Financial Group were the joint global coordinators for the deal.

    Lees ook:

    Lees ook:

  • Indonesia Extends Freeport’s Grasberg Mine Permit Amid Talks on Environmental Impact

    Indonesia Extends Freeport’s Grasberg Mine Permit Amid Talks on Environmental Impact

    Indonesia has extended a temporary operating permit for Freeport McMoRan’s Grasberg copper mine in Papua until the end of the month while discussions continue over long-term rights, a Mining Ministry official said.

    The United States-based mining giant’s local unit, Freeport Indonesia, was given a temporary operating permit until July 31 for Grasberg, the world’s second-biggest copper mine, Coal and Minerals Director General Bambang Gatot Ariyono said at a press conference on Tuesday (03/07).

    Freeport has been in negotiations with Indonesia to secure long-term operating rights at Grasberg after the government introduced new rules last year aimed at giving it greater control of its resources.

    However, efforts to finalize a deal have been overshadowed by concerns over Grasberg’s environmental footprint.

    “This month we hope all of the aspects – the divestment transaction, investment stability guarantees, the environment, a smelter – all of them are resolved,” Gatot said.

    Freeport’s previous temporary operating permit for Grasberg expired on June 30 after being awarded in January.

    Freeport’s Grasberg partner Rio Tinto and state-owned mining holding company Inalum are also involved in negotiations on Grasberg, which needs significant investment to develop an underground phase from its current open-pit construction.

    Inalum may complete a multi-billion-dollar deal to acquire a majority stake in Grasberg this month, officials said on Saturday, but details on how Freeport will maintain operational control have yet to emerge.

    According to Gatot, the main issues to be resolved were environmental matters, and discussions were ongoing “between the Environment and Forestry Ministry, the Freeport team and Inalum, who have requested an opportunity to resolve them.”

    Other matters, which include a requirement for Freeport to build a second copper smelter and adopt a new tax regime, “are nearly finalized,” he said.

    A 2017 state audit of operations at Grasberg that outlined massive damage from Freeport’s mine waste and a lack of proper environmental permits has complicated efforts to wrap up the deal.

    In April, following the audit, Environment and Forestry Minister Siti Nurbaya Bakar issued two decrees that gave Freeport six months to overhaul management of its mine waste.

    Freeport’s average daily copper ore production at Grasberg was between 175,000 and 176,000 metric tons so far this year, below its 2018 target of 230,000 tons, Gatot said.

    The company exported 465,000 tons of copper concentrate from February to mid-June, he added.

    Lees ook: