The Indonesian government may buy 17% of PT Newmont Nusa Tenggara, Newmont Mining Corp.'s (NEM) local unit, via state-owned mining companies, an Indonesian minister said Wednesday.

"The government is examining the possibility of buying 17% of (the local unit of) Newmont via state owned companies," Minister for State-Owned Enterprizes' Affairs Sofyan Djalil told reporters.

Djalil said nickel miner PT Aneka Tambang (ANTM.JK), coal miner PT Tambang Batubara Bukit Asam (PTBA.JK), tin producer PT Timah (TINS.JK) or other state-owned firms could buy the stake in PTNNT, as the Newmont unit is known.

Djalil's comments came after an international arbitration panel found that Newmont and minority partner Sumitomo Corp. were in default of their contract after failing to meet deadlines in 2006, 2007 and last year to sell a total of 17% of PTNNT to local buyers.

The arbitrators ruled Tuesday that 17% of PTNNT would have to be divested to Indonesian buyers within 180 days.

Earlier Wednesday, Minister for Energy and Mineral Resources Purnomo Yusgiantoro had said 10% of PTNNT must be sold to local governments, and only 7% could be sold to the central government.

Djalil didn't elaborate on the discrepancy.

Under its contract with the Indonesian government, Newmont is required to divest 51% of PTNNT, which operates the large Batu Hijau gold and copper mine on Indonesia's Sumbawa island, to local buyers.

-By Linda Silaen, Dow Jones Newswires; 62 21 3983 1277; Reuben.Carder@dowjones.com