Govt urges Newmont to sell 10 % share by year?s end

Government urged PT Newmont Pacific Nusantara (NPN), the Indonesian holding company of American mining giant Newmont Corp., to sell 10 percent share in its copper and gold mining unit PT Newmont Nusa Tenggara (NNT) by the end of this year.

Director General of Coal and Mineral Resources Simon Sembiring said in a hearing at the national parliament Thursday night that the divestment must be conducted by the year-end at the latest. ?There?s no need for negotiations,? he said.

Simon said that negotiation (between the government and NNT) is ongoing. "The government thinks that divestment process has not arrived at business-to-business agreement mechanism," he said.

Meanwhile, NPN President Director Martiono Hadianto said it wants further talks on concerns that the local governments' plans to buy the stake involve a non-state company.

?The process for divesting to a private entity and to the government is different,'' Martiono said. ?In the case of a business-to-business transaction, an open tender is required.?

NNT, which obtained its contract of works to operate a copper and gold mine in Batu Hijau, West Nusa Tenggara in 1986, is required to divest up to 51 percent of its shares to the government or Indonesian companies by 2010. By March 2008, the company should divest 10 percent of its shares as part of the mandatory divestment program.

Currently, NNT?s shareholders are Newmont Mining Corp (45 percent), local company PT Pukuafu Indah (PI) which controls 20 percent and a consortium led by ?s Sumitomo (35 percent). (*)