Deadline for Newmont divestment extended
Tuesday, April 19 2011 - 02:01 AM WIB
Kardaya Warnika, an expert staff to the energy and mineral resources minister, said in Jakarta on Monday that the decision to delay the divestment of the West Sumbawa-based company was made because the state investment agency (Pusat Investasi Pemerintah or PIP), which was assigned by the finance minister to buy, on behalf of the central govenrment, the remaining 7 percent shares that have to be divested by NNT?s foreign shareholders had not yet been ready to execute the deal.
In addition, the deadline for the divestment was also prolonged because there was a strong protest in West Sumbawa regency against the finance minister?s decision to by the company?s 7 percent stake, he said.
On Monday, more than a hundred of local people rallied near NNT mining area in Batu Hijau, West Sumbawa to protest the finance ministry?s decision. They however ended their protests in the afternoon after the energy and mineral resources agreed to extend the deadline to give all parties time to settle the problem.
The locals wanted the central government to allow the local authority to buy the shares.
According to the schedule, the divestment should be concluded on April 18 (Monday). This is the third extension after the one from December 18, 2010 to March 18, 2011 and the last from March 18 to April 18.
Under a mining contract signed in 1986 obliges, the mining company?s foreign shareholders, Newmont Indonesia Limited (NIL) and Nusa Tenggara Mining Corporation (NTMC), an affiliate of Japans Sumitomo Corporation, are required to divest 31 percent of their shares to local investors.
According to the contract, the central government has the first rights to buy the shares. The shareholders can sell the shares to other local parties, only after the central government has formally declined the offer.
In the previous divestment, the central government has appointed the local administration as the buyer, which then formed a joint venture with PT Multicapital, a business unit of coal giant PT Bumi Resources, to take over the shares.
NNT?s foreign shareholders have so far sold 24 percent of the shares to the joint venture called PT Multi Daerah Bersaing (MDB).
The government and NNT had agreed to fix the price of the last 7 percent shares at US$271.6 million. (godang)