Jakarta. Indonesia plans to conclude negotiations with Freeport-McMoRan Inc. on a fresh divestment of its local unit by early October, a move aimed at boosting state control over one of the world’s largest copper and gold mines.

Energy and Mineral Resources Minister Bahlil Lahadalia said Friday that talks with the US-based miner are entering the final stretch, with the government seeking to raise its stake in Freeport Indonesia (PTFI) to over 61 percent. The state currently owns 51 percent through mining holding company Mineral Industri Indonesia, known as MIND ID.

“I plan, maybe in early October, we will hold final negotiations with Freeport,” Bahlil told reporters in Jakarta. “The figure hasn’t been finalized, but it will be above 10 percent. God willing, closer to 12 percent.”

The additional divestment is a condition for Freeport’s request to extend its mining license beyond 2041. Under a regulation issued in 2024, the company must sell at least 10 percent of new, undiluted shares to Indonesian state entities to secure the renewal. Jakarta is also considering allocating part of the future stake to Papua’s regional-owned companies starting in 2041.

Bahlil said the agreement needs to be settled quickly so Freeport can continue long-term exploration and underground mining projects, which typically require 10 to 16 years of preparation. Without an extension, he warned, Grasberg’s output could peak in 2035 before declining sharply, eroding state revenues, jobs, and regional growth.

To avoid that scenario, the government is preparing to extend Freeport’s mining permit by 20 years, to 2061. President Prabowo Subianto has instructed officials to accelerate negotiations, according to Bahlil.

The minister added that the valuation of the new shares would be “very cheap” as Freeport’s book value of assets has already been largely depreciated. “I want it to be given at the lowest possible price to the government, in this case Papua’s BUMD and MIND ID,” he said.

Indonesia’s efforts to expand its stake follow decades of tension over Freeport’s role in Papua. The company first signed a contract in 1967, granting exclusive mining rights, which was extended in 1991 until 2021. Amid criticism over limited state benefits, Jakarta pushed for contract changes in 2009, culminating in a landmark 2018 deal that forced Freeport to divest majority ownership for $3.85 billion and commit to building smelters in-country.