Central govt wins extension for Newmont acquisition

The State Investment Agency (PIP) has signed an agreement with shareholders of PT Newmont Nusa Tenggara (NNT), represented by Nusa Tenggara Partnership BV, for an extension period in acquisition of a 7 percent stake in the company, The Jakarta Post reported.

PIP chairman Soritaon Siregar said that the transaction valued at US$246.8 million would be extended until Oct. 25 from the previous date of August 6, adding that the extension was a testament to the fact that both companies were committed to fulfilling a sales purchase agreement signed with Nusa Tenggara Partnership BV a joint venture between Newmont Mining Corporation and Sumitomo Corporation in May last year.

The Constitutional Court ruled against the government in a judicial review last week, in which the latter sought to overturn legal recommendations from the Supreme Audit Agency (BPK).

A BPK audit commissioned by the House last year found improprieties in the government?s share purchase agreement with NNT shareholders, particularly the government?s failure to seek approval from the House effectively barring the transaction.

Since 2006, Nusa Tenggara Partnership BV has gradually reduced its equity in NNT, which controls the rights over the Batu Hijau mining area.

This divestment has enabled the West Sumbawa and Sumbawa regency administrations and the West Nusa Tenggara provincial administration to own 24 percent of NNT through their joint venture with PT Multicapital, a unit of the Bakrie group. (*)