Govt may buy seven percent of Newmont shares

The government has agreed to buy 7 percent of Newmont Nusa Tenggara (NNT) shares which has to be divested by the company?s foreign shareholders this year.

Finance Minister Agus Martowardojo said in Jakarta Monday that he had formally sent a letter to the minister of energy and mineral resources expressing the government?s interest to buy the 7 percent of Newmont shares.

Newmont and the energy ministry had also confirmed that they had received the finance minister?s letter on the government?s interest to buy the shares.

NNT operates a gold and copper mine in Sumbawa, West Nusa Tenggara. Under a mining contract signed in 1986 obliges, the mining company?s foreign shareholders, Newmont Indonesia Limited (NIL) and Nusa Tenggara Mining Coorporation (NTMC), an affiliate of Japans Sumitomo Corporation, are required to divest 31 percent of their shares to local investors.

According to the contract, the government has the emptive rights to buy the shares that would have to be divested. The shareholders can sell the shares to other local parties, only after the 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.

NNTs foreign shareholders have so far sold 24 percent of the shares to the joint venture called PT Multi Daerah Bersaing (MDB).

The energy and NNT had agreed to fix the price of the 7 percent shares at US$271.9 million. The pricing was based on the calculation of the company?s total assets which are worth $3.88 billion. (*)