After 50 years as an open pit, the Grasberg mine is transitioning into the wold’s largest underground mine with a production rate of 240,000 t/d by 2023. (Image: Freeport McMoRan)
INDONESIA – British-based Rio Tinto has signed a binding agreement for the sale of its interest in the Grasberg copper-gold mine in Papua state. PT Indonesia Asahan Aluminium (Persero) (a.k.a. Inalum), the country’s state run mining company, is buying into the project.
Rio Tinto will pocket $3.5 billion for its 40% share of all underground block caving production above specific levels until 2021 and a 40% of all production thereafter.
The project is about 90% owned by Freeport McMoRan, but the Indonesian government wants to boost local control to 51%. A further agreement was signed between Inalum and Freeport. This transaction is inter-conditional and subject to a number of conditions precedent being satisfied, including the receipt of regulatory approvals. Subject to these conditions being met, completion of both transactions is expected to occur in the first half of 2019.
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