Govt, Newmont's talk on 2010 divestment stalled

The government failed to reach an agreement with copper and gold producer PT Newmont Nusa Tenggara (NNT), the Indonesian unit of US mining giant Newmont Corp., on the 2010 divestment price.

Bambang Gatot Aryono, director of supervision and development of mineral, coal and geothermal at the energy and mineral resources ministry said on Wednesday that there was a huge difference between the government and NNT about the price. But he did not reveal how much the government was offering for the 7 percent stake that NNT has to divest this year.

?There is a big gap between the prices offered by the government and the company, which is because both use as benchmark different assumptions of gold and nickel prices. Hopefully, there will be an agreement after two or three meetings," he said.

In April 2010, NNT's foreign shareholders offered another 7 percent shares as part of its 2010 divestment obligation required by a 1986 contract. The 7 percent stake is priced at $444.1 million, about 80 percent higher than the 7 percent stake offered in 2009.

PT Bumi Resources, the buyer of the 24 percent stake sold by Newmont?s foreign shareholders during the previous divestment, said that the company had not yet decided whether it would buy the remaining 7 percent of Newmont shares because the price was too high.

Under its contract of work, NTT?s foreign shareholders are required to divest 31 percent of their shares to the government or local businesses. This means that NNT's foreign shareholders need to sell another 7 percent to be able to meet the requirement.

PT Multi Daerah Bersaing, which is 75 percent owned by Bumi and 25 percent by the local administration company, has bought up to 24 percent of the 31 percent shares that have to be divested. (giok)