In 2026, a significant economic discussion unfolded in Jakarta that could shape the future of resource governance and community welfare in Indonesia’s easternmost province. The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, met with Governor Mathius Derek Fakhiri of Papua Province to advance plans for divesting 10 percent of shares in PT Freeport Indonesia to the government of Papua. This initiative, rooted in commitments from national leadership, aims to increase Papua’s stake in the benefits generated by its rich mineral resources and enhance long-term socio-economic development for the province’s residents.
The meeting represented a deeper coordination between the central government and provincial authorities toward implementing a vision that has been discussed at the highest levels of Indonesian leadership. With the target to complete the transaction by the first quarter of 2026, the exchange between Bahlil and Governor Fakhiri offers insight into the evolving relationship between Jakarta and Papua on matters of economic participation, autonomy, and equitable development.
A Long-Standing Conversation on Resource Sharing
Papua’s history with resource extraction has long been a balancing act, offering both economic gain and social challenges. The Grasberg mine, run by PT Freeport Indonesia, stands as a giant in the world of copper and gold. While it has generated significant income for Indonesia, the sharing of that wealth with local communities has been a constant source of debate.
In mid-December 2025, at a high-profile meeting at the Istana Negara in Jakarta, President Prabowo Subianto made his position clear. He directed government officials to investigate ways to divest a 10 percent stake in PT Freeport Indonesia, with the explicit goal of benefiting the people of Papua.
That initial directive paved the way for the following discussions between the provincial government and national ministries.
Velix Wanggai, who chairs the Papua Special Autonomy Acceleration Committee (KEPP-OKP), communicated President Jokowi’s instructions. Wanggai emphasized that the divestment should be integrated into a comprehensive strategy. The aim was to ensure that the wealth generated by Papua’s natural resources benefits the local communities. This required meticulous planning and cooperation between ministries, provincial leaders, and other involved parties, all with the objective of fostering sustainable development within the region.
The Jakarta Meeting: Concrete Actions
The meeting on January 21, 2026, between Minister Bahlil and Governor Fakhiri represented a significant advancement in this undertaking. Bahlil confirmed that the two discussed various planning and technical matters concerning the transfer of the ten percent stake to the province.
Shortly after the meeting, he spoke to journalists in Jakarta, expressing confidence that the divestment process would be concluded in the first three months of 2026.
Bahlil made it clear that the discussion focused on how the shares would be structured and allocated. The government wants to make sure that the divestment plan follows the current laws and financial rules so that the ownership change helps local institutions and, ultimately, the people of Papua, who have been asking for a bigger share of the economic benefits from local resources.
Governor Fakhiri’s participation in the talks underlined an increasing role for subnational leaders in major economic policy discussions that affect their communities. Provincial governments in Papua have been advocating for a more equitable share of revenues from large-scale resource projects, arguing that such revenues are crucial for improving public services, infrastructure, education, and health across the region.
From Policy to Practical Implementation
The divestment plan involves transferring an existing portion of government shareholdings in PT Freeport Indonesia, a company majority owned by Freeport McMoRan and with significant historical contributions to Indonesia’s economy since the 1990s. What makes this latest move noteworthy is the explicit earmarking of a 10 percent share for Papua Province, rather than generic central government ownership.
Once finalized, this stake is expected to be held through a legal provincial entity, potentially in the form of a government-owned company designed to manage the assets and optimize returns responsibly. Discussions among Papua’s provincial governors indicate that they intend to coordinate internally on how best to structure the shareholding so that all provinces in Papua benefit collectively, rather than concentrating advantages in a single jurisdiction.
Such internal provincial coordination reflects sensitivity about maintaining fairness among Papua’s diverse regions and ensuring that the revenue serves broad, long-term needs rather than narrow interests. This methodology is consistent with the tenets of regional autonomy and inclusive development, as articulated within Indonesia’s overarching governance structure.
Economic Empowerment via Local Ownership
A wider economic empowerment paradigm underpins the decision to allocate shares to the provincial government. Possession of shares in a significant enterprise such as PT Freeport Indonesia transcends mere symbolism. It furnishes Papua and its populace with a tangible entitlement to a share of profits, dividends, and prospective capital appreciation.
Revenue generated from these shares, when handled wisely, could be directed toward essential public investments aimed at tackling ongoing development hurdles. In Papua, numerous communities grapple with inadequate access to good education, healthcare, transportation networks, and job prospects. A consistent flow of dividends from Freeport shares could offer a supplementary revenue source for provincial priorities, enabling local officials to plan beyond the constraints of annual budgets reliant on central government transfers.
Balancing Local Interests and National Goals
The divestment plan, while signaling a move toward greater local economic involvement, also reflects a delicate equilibrium between national and regional interests.
Freeport Indonesia continues to be a key player in Indonesia’s mining industry, playing a vital role in exports, government income, and investment. It’s in the best interest of both the central government and local authorities to see the company thrive, operating efficiently and competitively.
The national government, especially through ministries like ESDM, is involved to make sure that any divestment deals are legally sound, financially viable, and in line with national economic goals. This partnership also gives investors confidence that changes in ownership are handled with care, considering corporate governance, regulatory requirements, and the long-term stability of operations.
Viewed this way, the divestment isn’t just a simple transfer of assets. It’s a negotiated change that reflects shifting views on ownership, economic fairness, and shared wealth.
A Path Toward Inclusive Growth
Indonesia’s divestment plan arrives as the nation prioritizes inclusive growth, aiming to lessen regional disparities. Papua, often overlooked in terms of infrastructure and public services, could gain from approaches that allow for increased local involvement in revenues from resource extraction.
The government’s decision to broaden local share ownership in Freeport reflects the persistent demands from Papuan communities for a fairer allocation of the wealth derived from their natural resources. Indigenous leaders and advocacy groups have consistently maintained that local populations should not only endure the impacts of resource extraction but also experience real and lasting economic advantages.
The divestment plan, in essence, represents a policy move that aligns national economic objectives with the regional desires for self-governance, active involvement, and better living standards.
Looking ahead, there are challenges and opportunities to consider.
Even with the promising direction, specific implementation details are still unclear. Questions persist regarding the ownership structure, how dividends will be distributed among Papua’s provinces, and the integration of revenues into wider development strategies.
Furthermore, strengthening the capabilities of provincial institutions to handle substantial equity holdings and the accompanying financial resources will be vital.
The realization of tangible benefits for local communities stemming from the economic advantages of Freeport shares hinges on the establishment of effective governance, transparency, and well-defined accountability structures.
Moreover, public communication poses a significant challenge, requiring citizens to understand the complexities of the divestment process, the distribution of generated revenue, and the measures implemented to safeguard community interests over a prolonged duration.
Nevertheless, the unequivocal signals emanating from both central and provincial governmental bodies indicate a collective dedication to advancing the process. With a projected completion date for the divestment set for the initial quarter of 2026, policymakers seem resolute in their intention to translate strategic deliberations into concrete, tangible results.
Conclusion
The coordinated talks between Minister Bahlil and Governor Fakhiri reflect a growing emphasis on participatory economic governance in Indonesia, particularly in regions that have historically felt excluded from resource-driven prosperity. The plan to divest 10 percent of PT Freeport Indonesia’s shares to the Province of Papua embodies a concrete commitment from both national and regional leaders to create pathways for local economic benefit, greater autonomy, and inclusive development.
As the process moves toward its expected completion in 2026, the eyes of communities in Papua and policymakers across the archipelago remain fixed on how this initiative unfolds. Its success could offer a model for balancing national economic interests with regional rights and aspirations, illustrating how resource wealth can be more fairly shared and directed toward long-term welfare improvements.
In a nation as diverse and resource-rich as Indonesia, efforts like this shape not only economic outcomes but also the very meaning of equitable development in the twenty-first century.