Court orders Newmont to sell stake to Indonesian govt

International Arbitration court has on Tuesday ruled in favor of Indonesian government and has ordered Denver-based mining giant Newmont Mining Corp. to sell its 17 percent stake at West Nusa Tenggara copper and gold mine PT.Newmont Nusa Tenggara (NNT) to Indonesian government or an entity appointed by the government, a senior state attorney said.

Attorney Joseph Suardi Sabda who represents Indonesian government told reporters that Newmont is obliged to sell 17 percent stake at NNT to Indonesian government. The shares must be sold in de-collateralized condition, he added. ?Failure to comply with the ruling will result in NNT contract of work (CoW) termination,? he said.

The court, however, rejected government?s demand to terminate NNT CoW, he said.

Government and Newmont brought NNT divestment case earlier this year to Arbitration court after negotiation on NNT mandatory divestment failed

Under a 1986 contract, Newmont Mining and other foreign shareholders of NNT are required to gradually sell a 49 percent stake in the company to a local party or parties.

Newmont owns 45 percent of NTT, which operates a copper mine in Batu Hijau. Japanese firm Sumitomo Corp.control 35 percent and PT.Pukuafu Indah, an Indonesian company controlled by businessman Jusuf Merukh hold the remainder.

By the end of 2007, according to the contract, the foreign shareholders were supposed to have sold 10 percent of their stake in NNT, which they failed to do.

The government issued a so-called default notice to Newmont early last month, while threatening to terminate its contract if it failed to meet the new divestment deadline of Feb. 22.

Newmont then failed to meet a new deadline of March 3, leaving the government no choice but to take the case to arbitration; Minister of Energy and Mineral Resources Purnomo Yusgiantoro said early March.(bernard)