Govt to review Newmont share divestment value

The government will review the value of the stakes that PT Newmont Nusa Tenggara (PTNNT) has to divest in line with its contract of work.

The price issue has gained greater urgency after an international arbitration court ruled on Tuesday that the copper and gold miner had failed to honor its divestment obligation.

Several state owned mining companies have voiced interest to buy the stake.

The government has formed a team of appraisers including officials from the Ministry of Energy and Mineral Resources, the Ministry of Finance, and the Investment Coordinating Board (BKPM), Bambang Setiawan, the Energy Ministry?s director general of mineral, coal, and geothermal resources, said on Friday.

?We previously agreed on the prices for the 3 percent to e divested in 2006 and the 7 percent to be divested in 2007,? he said.

?But these prices are no longer relevant given current market conditions.?

Newmont offered a 3 percent stake in 2006 for $109 million, a 7 percent stake for $282 million the following year and a 7 percent stake for $426 million in 2008.

It also offered a 7 percent stake this year for $348 million.

The government reported the firm to arbitration court, accusing it of deliberately stalling the divestment process after finding out that the firm had put its stake as loan collateral

In its ruling on Tuesday, the Geneva-based arbitration court ordered Newmont to sell a 17 percent stake to the government within 180 days. This stake is made up of the shares the company was required to divest in 2006, 2007 and 2008.

NTT is 45 percent owned by Newmont Corp., 35 percent by a consortium led by Japan?s Sumitomo and PT.Pukuafu Indah, an Indonesian company controlled by businessman Jusuf Merukh, holds the remainder. (*)