Indonesia Min: Government Aims To Buy 21% Of Newmont Unit
April 21 2009 - 3:17AM
Dow Jones News
The Indonesian government aims to buy a 21% stake in Newmont
Mining Corp.'s (NEM) local unit that is due for divestiture,
possibly as early as this year, the minister for state-owned
enterprises' affairs said.
"If we can legally acquire that much (of the unit), we will take
it," Sofyan Djalil told reporters Tuesday.
He added that the Finance Ministry is reviewing possible methods
by which the government can buy the stake in PT Newmont Nusa
Tenggara, which operates Batu Hijau, one of the world's largest
copper and gold mines, located on Indonesia's Sumbawa island.
Under its contract of work with the Indonesian government,
Newmont was scheduled to sell 3% of the local unit, known as PTNNT,
to Indonesian parties in 2006, and a further 7% every subsequent
year to 2010.
The 3% stake due for divestiture in 2006, and 7% in 2007, are
earmarked for local governments near the mine site, with the
central government holding first right of refusal over the
remaining 21% to be divested by next year.
The government "will exercise our rights up to 2010," Djalil
said. He said the government has requested that Newmont this year
divest its 7% due in 2010.
Djalil didn't elaborate on a time frame for the purchases.
However, international arbitrators on March 31 gave Newmont a 180
day deadline to complete the sale of the 17% of PTNNT that was due
in previous years.
Djalil said it has requested Newmont to remove a pledge
agreement from the shares before they are divested. Under the
agreement, shares in PTNNT are pledged as collateral to Newmont's
senior lenders on the Batu Hijau project.
Newmont has said the arrangement is legal and isn't an obstacle
to divestiture.
Local media reported that Newmont has offered the 7% of PTNNT
due for sale last year at $426 million and the 7% stake due to be
divested this year at $348 million.
-By Linda Silaen and Reuben Carder, Dow Jones Newswires; 62 21
3983 1277; Reuben.Carder@dowjones.com