Central govt officially decides not to buy seven percent stake in NNT

The central government has decided not to buy a seven percent stake in copper and gold miner Newmont Nusa Tenggara (NNT) due to the lack of funds.

 

The seven percent divestment, valued at US$282 million, is scheduled to be held this year.

 

Director General of Mineral, Coal and Geothermal Affairs of the Energy and Mineral Resources Ministry Simon Felix Sembiring said in Jakarta Wednesday that the decision was mentioned by the Ministry of Finance in an official letter sent to the Ministry of Energy and Mineral Resources a week ago.

 

As a consequence of the government’s decision, Simon said, the central government hands over the right to buy the stake to the local government. “The local government has expressed its interest in buying the stake  and so we have told NNT to follow it up in compliance with the existing law and prevailing contract,” he said.

 

Aside from the seven percent stake offered this year, NNT offered a three percent stake last year in line with its contract which requires it to divest up to 51 percent of its shares to either the central government, local governments, state owned enterprises or Indonesian-controlled companies.

 

According to Simon, the three percent stake will be bought by the regency administration of West Sumbawa, while the seven percent stake will be bought by the Nusa Tenggara Barat (NTB) provincial admnistration along with the Sumbawa regency . "They already have an agreement among them," he said.

 

Currently, six investors are competing to provide US$109 million in funds for West Sumbawa to buy the three percent stake, that is PT Danatama Makmur, PT Recapital, Credit Swiss, PT Newmont Indonesia Limited, PT Bumi Resources Tbk, and PT Dharma Henwa Tbk.

 

Meanwhile,  NTB and  Sumbawa administrations will form a consortium with PT Bumi Resources Tbk to buy the seven percent stake.

 

Current NNT’s shareholders are Newmont Mining Corp (45 percent), local company PT Pukuafu Indah (PI) which controls 20 percent and a consortium led by ’s Sumitomo (35 percent). (godang)