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Bumi pays $391m for stake in Newmont

Giant coal producer PT Bumi Resources has paid US$391 million for a 10 percent share acquisition in PT Newmont Nusa Tenggara (NNT), NNT’s president director Martiono Hadianto said Monday

Alfian (The Jakarta Post)
Jakarta
Tue, November 17, 2009

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Bumi pays $391m for stake in Newmont

Giant coal producer PT Bumi Resources has paid US$391 million for a 10 percent share acquisition in PT Newmont Nusa Tenggara (NNT), NNT’s president director Martiono Hadianto said Monday.

Martiono said Bumi has transferred the money through Bank Mandiri’s branch in Singapore. “We have received [the confirmation] of the transfer,” he told reporters, adding that 56 percent of the money was transferred to Newmont’s bank account in Citibank in New York and the remaining 44 percent went to Sumitomo’s account in Mitsui Bank in Tokyo .

NNT is a local subsidiary of US mining giant Newmont Corp. which operates the Batu Hijau mine, Indonesia’s second largest copper mine, in West Nusa Tenggara Province.

Two weeks ago, NNT’s foreign shareholders had signed the agreement to divest 10 percent of their shares in NNT to PT Multi Daerah Bersaing (MDB), a joint venture owned 75 percent by a Bumi business unit and 25 percent by a company representing three regional administrations in West Nusa Tenggara.

As part of the agreement, MDB is required to pay the divestment on Monday by 5 p.m. at the latest.

Martiono said that NNT’s foreign shareholders had accepted a bank transfer from MDB by 3 p.m. on Monday, while Newmont might receive the money on Monday by 8 p.m., while Sumitomo should receive its money by 7 a.m. Tuesday.

A 1986 mining contract requires Newmont and Sumitomo to sell a total of 31 percent of their stake in the company by 2010 to the government, be it central or regional, or to local parties designated by the government. This provision was recently endorsed by an overseas arbitration panel in March.

Newmont, the central government, and the West Nusa Tenggara provincial government are also in talks over the divestment process for another 14 percent stake in NNT. These talks are extended until Nov. 23.

“As part of the agreement to extend the deadline, the government acknowledged that NNT has fullfilled the divestment obligation for the period  between 2006 and 2009,” Martiono said.

NNT’s foreign shareholders and the government have also agreed that the divestment of the remaining 7 percent stake will be discussed next year.

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