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State miners may buy Newmont stakes: Govt
The Office of the State Ministry of State Enterprises may request state mining companies to form a consortium to acquire 17 percent stakes in copper and gold miner PT Newmont Nusa Tenggara (NNT)
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The Office of the State Ministry of State Enterprises may request state mining companies to form a consortium to acquire 17 percent stakes in copper and gold miner PT Newmont Nusa Tenggara (NNT).
“The office is still studying the possibility of setting up a consortium of state mining companies to acquire the divested shares,” secretary to the State Enterprises Minister Said Didu said recently.
The interested companies, according to Said, included nickel producer PT Aneka Tambang (Antam), coal producer PT Tambang Batubara Bukit Asam (PTBA) and tin miner PT Timah.
Said also said that local administrations were also encouraged to join the planned consortium.
A Geneva-based international arbitration court, the United Nation Commission on International Trade Law (UNCITRAL), required on March 31 that NNT overseas shareholders complete the share divestment within 180 days starting on April 1.
The ruling stems from a mining contract in 1986, which required the shareholders to gradually reduce their stakes in NNT to 49 percent by 2010.
US giant miner Newmont Mining Corp. owns 45 percent of NNT, Sumitomo Corp. owns 35 percent and PT Pukuafu Indah, a private Indonesian company holds the remaining 20 percent.
NNT overseas shareholders are supposed sell their combined 3 percent of the stakes in 2006 for US$109 million, 7 percent in 2007 for $426 million, and another 7 percent in 2008 for $348 million, according to Said.
Said said the state mining companies were in the process of conducting feasibility studies on the prospective purchase.
PTBA president director Sukrisno confirmed the potential consortium plan to The Jakarta Post recently. However, he said the state mining firms were still awaiting legal clarity on the status of the stakes from the government.
The stake to be divested is currently being put up by NNT shareholders as collateral for $1 billion in loans from overseas financing companies. The loans have been used to develop NNT mining activities.
“The collateral issue is among the legal obstacles. We are still waiting for government instruction on this matter. But should the consortium be established, PTBA is expected to contribute less because gold is not our main business,” he said.
“It can be assured that Antam will take the majority share in the consortium,” he said.
However Antam president director Alwinsyah Loebis told the Post he had never heard of this plan. “We haven’t had any conversations relating to it (the establishment of the consortium). We don’t have any plan (to acquire the NNT stake) yet.”
PT Timah corporate secretary Abrun Abubakar said the company would discuss the plan with management before any decision.
Meanwhile, state prosecutor Joseph Suwardi Sabda, who deals with the NNT stake divestment case, said the company’s shareholders must immediately clear the divested stake from being put up as collateral in order for the firms appointed by government to be legally able to purchase the stakes.
He said should NNT fail to clear the shares from these collateral obligations then the state prosecutor would require the Energy and Mineral Resources Ministry to revoke the NNT operating license after the 180 days deadline passed.
Under corporate law, shares being put as collateral can be legally sold to other parties.
However, under the state treasury law, the government and state companies are prohibited from purchasing collateralized shares because of fear of future legal disputes which could risk taxpayers money. (fmb)
