Govt wants extension of Newmont divestment deadline
Saturday, September 12 2009 - 03:21 AM WIB
?We have asked for the extension of the NNT divestment for another 180 days,? Finance Minister Sri Mulyani Indrawati said following a ministerial meeting in Jakarta on Friday.
The minister did not elaborate why the government needed to extend the divestment deadline, which would end on Sept. 27, this year.
But Bambang Setiawan, the Director General of Coal and Geothermal at the Ministry of Energy and Mineral Resources, said that the extension of the deadline for the divestment as stipulated in the arbitration verdict was needed to give the government more time in the selection of companies or parties it would appoint to buy the shares.
According to him, the extension of the deadline would not violate the arbitration verdict as long as it is approved by both parties. The international arbitrators issued a verdict in March this year, ordering Newmont to execute the divestment of the company?s 17 percent shares in six months until Sept. 27.
The decision was made after both government and NNT agreed to settle their dispute through the arbitration tribunal based on the UN Commission on International Trade Law (UNCITRAL). The dispute was related to the divestment of the company?s 17 shares which were supposed to be made in 2006 (3 percent), in 2007 (7 percent) and in 2008 (7 percent).
Under its mining contract, the US based mining giant Newmont is obliged to sell 31 percent in NNT, which controls the Batu Hijau gold mine concession in West Nusa Tenggara, to the government or local companies from 2006 to 2010. Under the share divestment scheme, 3 percent should be divested in 2006, 7 percent each in 2007, 2008, 2009 and 2010.
The local governments (West Nusa Tenggara province, West Sumbawa and Sumbawa regencies) have been appointed to buy 10 percent that should have been divested in 2006 and 2007, while the central government the 14 percent that should have been divested in 2008 and 2009.
The local governnments have said they would cooperate with Bumi Resources? subsidiary Multicapital to buy the 10 percent stake in NNT. The central government will buy the 14 percent shares, most likely through state firms. But the local government has also demanded to be involved in the purchase of the 14 percent stake. (*)