Jakarta: State-Owned Enterprises (BUMN) Minister Rini Soemarno appointed Budi Gunadi Sadikin to be the President Director of PT Indonesia Asahan Alumunium (Inalum) (Persero), replacing the previous President Director Winardi Sunoto. Submission of the decision letter for the appointment of Budi Gunadi Sadikin was carried out at the Ministry of State-Owned Enterprises (BUMN), Jakarta, Thursday (14/9).
Budi Gunadi Sadikin was appointed as President Director based on the decision of the General Meeting of Shareholders. Budi’s appointment is part of the formation of the State-Owned Mining holding company. It is because Inalum will become the holding company for Indonesian mining. The Holding was formed to acquire 51% of PT Freeport Indonesia’s shares, released through Divestment.
State-Owned Enterprises Minister Rini Soemarno assessed Budi Gunadi Sadikin as a capable figure in leading PT Inalum. “Precisely because he is qualified in the financial sector. He has been the chairman of Bank Mandiri for a long time, so he has quite a broad experience. Furthermore, in banking, his knowledge in various sectors, including Mining, is also high. He knows how to improve the mining sector as well as understanding finance,” she said.
Energy observer Fahmy Radhy said that Budi’s choice to replace Winardi had two goals. First, it is related to the acceleration of the formation of the State-Owned Mining Company. Then the second task is to improve Inalum’s performance. “The appointment of Budi Gunawan Sadikin is to improve Inalum’s performance, which has recently started to decline,” Fahmy told Investor Daily.
Fahmy said that Budi, a former President Director of Bank Mandiri, had succeeded in increasing Mandiri’s performance. It is just that he doubts this will happen in Inalum. It is because Budi has no experience in managing the mining sector business. According to him, if Inalum’s performance failed to improve, it was feared that it would impact Holding’s formation. “If it fails to raise Inalum’s performance, it is feared that it will interfere with the formation of the Mining BUMN Holding, which will buy Freeport’s 51% stake,” he said.
He said that Budi had served as the Special Staff of the Minister of SOEs, who, of course, followed the discussion on the formation of a holding and the strategy to annex Freeport shares. However, according to him, this has not guaranteed 100% success in forming a holding or related to Divestment. “Not because of his closeness to Rini, then Budi is appointed as Managing Director of Inalum,” he said.
The 51% divestment is currently being finalized at the Ministry of State-Owned Enterprises. It is following President Joko Widodo’s direction. Divestment is one of the negotiating points for the change in the PT Freeport Indonesia Contract of Work status to a Special Mining License (IUPK). The mining company from the United States is ready to sell 51% of its shares through Divestment. Now the Ministry of State-Owned Enterprises and Freeport discuss the release plan’s details starting from day to day to the share price.
Separately, the Coordinator of Publish What You Pay, Maryati Abdullah, revealed that Mining State-Owned’s holding was the right party to take Freeport shares. She said with Holding, there is only one entity in the shareholder composition. That way, there is only one voice for the government in making decisions later. It is different if 51% of the shares are controlled in the form of a consortium. It creates much intensity in it, which can complicate the decision-making process. “Divestment is about controlling. 51% is one entity or many? Ideally, this should be owned by the government through a State-Owned holding. So one entity and one vote,” she said.
Maryati criticized the government’s steps in negotiating with Freeport. The government should first have a scheme whether Freeport’s operations are extended or not after 2021. According to her, this is a reference in determining the next steps. It is not like today, where an agreement was reached with Freeport, but only in verbal terms. She also asked Freeport to immediately build a smelter without waiting for the divestment process to complete. The construction of a smelter is mandated in the Contract of Work (KK), which must be implemented. “If you wait for the divestment to be completed, the smelter construction will use funds from the government,” she said.
Meanwhile, Natural Resources Legal Observer from Tarumanagara University Ahmad Redi said that the government did not need to spend a penny controlling Freeport. It was done by not extending Freeport’s operations. However, it turns out that the government will not take this effort. Therefore, he advised the government not to buy the 51% shares. It is because mineral reserves in Tembagapura, Papua, are owned by the state. It is controlled by the state and used for the most significant benefit of the people. “It is like people renting our land. The contract was over. How come we were ordered to buy,” he said. (rap)