Arifin wants to acquire Newmont
Thursday, November 26 2015 - 01:22 AM WIB
This was said by Coordinating Minister for Maritime Affairs Rizal Ramli in a statement Wednesday following a meeting with Arifin, whose family controls IDX-listed energy company PT Medco Energi Internasional Tbk. ?Arifin?s initiative to acquire Newmont is good. This proves that national force is able to acquire and mange large mine. This is important because it has always been said that we?re unable,? said Rizal, whose office also oversees the mining sector.
Rizal said that if realized, Arifin would build a copper smelter with capacity of 500,000 tons per year. PT Newmont?s copper output currently stands at about 400,000 tons per year. The greater smelter capacity is to anticipate future production from mines located near the current producing Batu Hijau mine in West Nusa Tenggara.
The government has required PT Newmont to build domestic copper smelter, but the company has declined to do so considering that such project would not be economically feasible. Instead, the company has decided to team up with PT Freeport Indonesia to build a $2.3 billion smelter in Gresik, East Java, by contributing about $3 million.
No further details were provided about the acquisition plan including where Arifin would get the required funds.
PT Newmont is 56 percent controlled by Nusa Tenggara Partnership BV, a consortium comprising of US-based Newmont Mining Corp and Japan?s Sumitomo Corp, whose mining contract will expire in 2030. The remaining shares are held by local firms including PT Multicapital (Bakrie Group, 18%), PT Pukuafu Indah (17.8%), PT Daerah Maju Bersaing (6%), and PT Indonesia Masbaga (2.2%).
Meanwhile, Kontan quoted Arifin?s younger brother Hilmi Panigoro, recently-appointed President Director of PT Medco, as saying that Arifin?s plan to acquire PT Newmont is outside Medco?s business agenda. ?We have yet to be involved, and it has yet to be decided,? he said.
Director for Mineral Management at the Ministry of Energy and Mineral Resources Mohammad Hidayat said Wednesday that Arifin has yet to report to the ministry about the acquisition plan.
Editing by Reiner Simanjuntak