Govt will soon fix the price of Newmont shares

The Ministry of Energy and Mineral Resources will soon fix the price for the shares of PT Newmont Nusa Tenggara (NNT), a subsidiary of US-based giant miner Newmont Mining Corp., which are to be sold as part of the company's mandatory divestment, Kontan reported Monday.

 

M.S. Marpaung, the director for development of minerals and geothermal, said in Jakarta over the weekend that the govenrment has finished calculating NNT's assets. Based on the calculation, NNT's value is estimated at between US$4 billion and $4.1 billion, lower than the $4.6 billion as stated in the NNT’s balance sheet.

 

“It is an estimated value. The fixed figure will be determined by Minister of Energy and Mineral Resources,”  Marpaung said.

 

He said that the government's version of the value of Newmont’s total assets would be used as the basis to fix the price of the company’s 7 percent stake which had to be divested this year.

 

According to the government, NNT's reserves is estimated to 6.3 billion pound of copper and gold of about 7.2 million ounce.

 

The Ministry of Energy and Mineral Resources earlier set a target until February 2007 for the completion of the divestment of three percent of NNT’s stake, but the process has yet to be completed.

 

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 of Indonesian companies by 2010. By March 2008, the company should divest 10 percent of its shares as part of the mandatory divestment program.

 

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