Indonesia and Freeport-McMoRan Inc. may sign a new agreement as soon as this weekend that will lay out a road-map for the transfer of majority ownership of the giant Grasberg mine to a local firm, according to people familiar with the proposal. Freeport shares rose.

The nation’s government, state-owned PT Indonesia Asahan Aluminium — known as Inalum, and Phoenix-based Freeport are set to back a so-called transaction completion agreement as early as Sunday, the people said, speaking on condition of anonymity as the details are private. Under the new deal, Inalum will seek to acquire London-based Rio Tinto Group’s joint venture interest in Grasberg by March, and subsequently aim to convert the interest into an equity stake, two of the people said.

Eric Kinneberg, a spokesman for Freeport, declined to comment. Rio Tinto declined to comment in an email. Ricky Gunawan, Inalum’s corporate secretary, didn’t immediately respond to calls and text messages requesting comments.

Shares in the Phoenix-based company led gains by large metal producers on Friday, jumping 3.5 percent at 11:05 a.m. in New York.

Freeport, Indonesia and others will soon sign an agreement that will include a target to finalize the planned transfer of control of Grasberg in the first three months of next year, the country’s State-Owned Enterprises deputy minister Fajar Harry Sampurno said in a text message. He declined to elaborate.

Tensions eased

Local ownership of Grasberg will rise to 51 percent under a framework deal agreed in August that will see the U.S. miner divest a majority stake in local unit PT Freeport Indonesia — of which Freeport currently owns 91 percent. In return, Freeport would be authorized to continue to operate the project through 2041. That pact also set out plans for investment of as much as $20 billion through 2031 to further develop the mine.

The new plan will include a schedule to settle issues on a mining license and the planned construction of a smelter, according to the people.

A fresh agreement comes amid an easing of tensions between key parties after Freeport in September rejected Indonesia’s proposals on the valuation and planned method of divestment of the miner’s local unit. Since then, talks involving the two sides, and Rio, have shown progress, State-Owned Enterprises Minister Rini Soemarno said last month in an interview.

Rio has held direct talks with Inalum about a potential exit from Grasberg, people with knowledge of the matter said in October. Under a joint venture arrangement, the world’s No. 2 miner is entitled to cash flows on a 40 percent share of production above specific levels until about 2021 — though that date is subject to potential delays, and on 40 percent of all production thereafter.

A deal for Rio to sell its interest in Grasberg could be structured so that Freeport’s obligation to divest its own stake in the mine would be reduced, Christopher LaFemina, an analyst with Jefferies LLC in New York, said in a note this month. The plan would allow for “an elegant solution to a complex problem,” according to LaFemina.

Freeport’s Indonesian unit expects to ship about 1.1 million metric tons of copper concentrate by the end of this month, the company said last month. It won a government permit to export concentrates in February.

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