Regional governments will lead a group of investors, including state mining firm PT Aneka Tambang, to acquire a 14 percent stake in PT Newmont Nusa Tenggara (NNT), now in the process of divestment.
NNT is a local subsidiary of US mining giant Newmont Corp.
Energy and Mineral Resources Minister Darwin Saleh said Wednesday that the decision was taken earlier this week after a recent meeting attended by Finance Minister Sri Mulyani Indrawati, State Minister for State Enterprises Mustafa Abubakar, as well as Coordinating Minister for the Economy Hatta Radjasa and himself.
His statement seems to clarify news reports quoting Hatta as saying that Antam would lead the
consortium.
“News reports saying that Antam would ‘lead’ the consortium in the acquisition process is not true, and this was not the decision taken from the meeting,” Darwin said through a text message.
Being a consortium leader would certainly boost the chances of local governments to take higher stakes in Newmont, having just bought 10 percent in the company through a joint venture called PT Daerah Maju Bersaing (DMB) backed financially by PT Multicapital, an affiliate of Indonesia’s biggest mining company PT Bumi Resources.
The regional governments are Nusa Tenggara Barat province, Sumbawa Regency and West Sumbawa Regency.
Heryadi Rachmat, head of Nusa Tenggara Barat’s provincial energy and mineral office confirmed the appointment, saying that the regional governments would be the owner of the majority of the divested shares.
“The shares will be owned by DMB, which is a company formed by the regional governments,” he said, adding that other parties, including Antam, would simply be DMB’s partners to help the company finance the acquisition, in addition to Multicapital.
“This has been our commitment,” he said of its partnership with Multicapital.
It has been reported that the price of the 14 percent Newmont stake would be US$493.64 million. The 10 percent stake recently bought by the three regional governments was purchased for $391 million.
NNT operates the Batu Hijau mine, Indonesia’s second-largest copper mine located in NTB, and is 45 percent owned by Newmont Mining, 35 percent by Sumitomo Corp. and 20 percent by PT Pukuafu Indah, a private Indonesian company.
According to a 1986 contract, Newmont Mining must gradually sell a total of 31 percent of its stake to the government or local parties appointed by government by 2010.
With 10 percent already sold to a consortium of local governments, the company is now in negotiation to release the additional 14 percent stake to the same consortium, supported by its financial backers.
The other 7 percent stake will not be divested before 2010, as stipulated under the contract.
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