The sale is the first in a contractually-imposed gradual divestment scheme requiring current Newmont owners to relinquish control over 51 percent of the shares in the company by 2010.

Chairman of Regional Legislative Council for West Nusa Tenggara province, Muhammad Amin, confirmed the deal Friday at the offices of the Energy and Mineral Resources Ministry in Jakarta.

"We are set to buy a 2 percent stake for $72.6 million. We are still negotiating other terms such as CSR", Amin said, referring to corporate social responsibility.

A higher price had been established previously; during negotiations between Newmont and the ministry the price of a 1 percent stake in the company had been set at $40.2 million.

In accordance with the agreements that permit the foreign investment company to exploit minerals in Indonesia, Newmont was to divest 3 percent of its shares in 2006 and another 7 percent in 2007.

The $76.6 million equity transfer will form part of the 7 percent stake, with West Nusa Tenggara provincial administration in talks to buy more shares.

The Investment Coordinating Board (BKPM) is supervising the transaction.

As for the 3-percent divestment referred to in the contract, West Sumbawa regency has showed its willingness to proceed and negotiations are likely to start soon.

Newmont spokesperson Martiono Hadianto, also present at the ministry, said that the transfer giving the regency control over 3 percent of Newmont's shares was still subject to ministry approval.

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