Newmont asks to meet local governments on divestment

PT Newmont Nusa Tenggara (NNT), the Indonesian unit of American mining giant Newmont Corp. has asked to meet the governments of West Nusa Tenggara province, West Sumbawa regency and Sumbawa regency settle problems related to the firm?s share divestment.

The request for the meeting was mentioned by the firm?s foreign shareholders, Newmont Indonesia Limited and Nusa Tenggara Mining Coporation, in letters sent to the provincial and regental governments on Tuesday.

The meeting aims to talk about ?principle agreements? with the local governments on the divestment for which the central government has set March 3, 2008 as the deadline.

?We believe we are close to finalizing an agreement revolving around the divestment and we are optimistic that a solution can be reached if we are given another chance to meet to talk about details,? PT Newmont Pacific Nusantara?s President Director Martiono Hadianto said in a statement on Wednesday.

Earlier, West Nusa Tenggara provincial administration and West Sumbawa regency administration warned that they would take a legal action against NNT for using the company's shares as loan collateral.

The company has used its shares as collateral for $1 billion worth of loans from the Export Import Bank of Japan and Kreditanstalt fur Wiederaufbau in Germany, which makes it impossible for the company to divest 10 percent of its shares to local governments, as demanded by the 1986 contract.

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 the end of 2007, the company should have divested 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). (denny)