Govt, NNT say 2010 divestment program to complete this month

Copper and gold miner PT Newmont Nusa Tenggara (NNT) and the central government were close to an agreement on the price of the remaining 7 percent shares that the firm has to divest to local investors as stipulated in its contract, the company?s senior executive has said.

Martiono Hadianto, president director of NNT, said in Jakarta on Friday, as quoted by Bisnis Indonesia, that the negotiation was still going on but he was sure that the agreement could be achieved later this month.

Separately, Bambang Setiawan, the director general of minerals, coal and geothermal at the energy and mineral resources ministry, confirmed that both parties are nearing an agreement.

But both Martiono and Bambang refused to disclose the price being negotiated.

In August, the government failed to reach an agreement with NNT 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 Aug. 18 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.

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.

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 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.

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. (*)