July 13, 2018 / 2:50 AM / 2 months ago

Indonesia's Inalum secures $5.2 billion financing for Freeport deal - sources

JAKARTA (Reuters) - Indonesia’s state-owned miner Inalum has secured $5.2 billion (3.9 billion pounds) in financing from 11 foreign and local banks, according to sources with knowledge of the matter, to be used in part to buy a majority stake in the Grasberg copper mine.

FILE PHOTO: Trucks operate in the open-pit mine of PT Freeport's Grasberg copper and gold mine complex near Timika, in the eastern region of Papua, Indonesia on September 19, 2015 in this photo taken by Antara Foto. REUTERS/Muhammad Adimaja/Antara Foto/File Photo

This comes a day after Freeport-McMoRan Inc (FCX.N) said it would sell a majority stake in the world’s second-biggest copper mine to the Indonesian state-owned miner via a series of complex deals worth $3.85 billion.

Indonesia's Energy and Mineral Resources Minister Ignasius Jonan (L) and Indonesia's Finance Minister Sri Mulyani Indrawati (C) watch as Freeport-McMoRan Chief Executive Officer Richard Adkerson signs an initial agreement for the state-owned mining company PT Inalum to take a controlling stake in Freeport's local unit during a ceremony in Jakarta, Indonesia, July 12, 2018. REUTERS/Darren Whiteside

The Grasberg deal will be paid off quickly, helped by forecast returns from the mine, Inalum CEO Budi Gunadi Sadikin told Reuters on Friday.

“By our calculations it will be two years,” he said, without providing any further details.

Freeport has said the deal will be positive for both sides, but noted the agreed value was far less than it could have gotten, highlighting the company’s desire to end more than six years of wrangling that has weighed on its shares.

Editing by Christian Schmollinger and Himani Sarkar

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