Newmont lends local governments to buy subsidiary stake

PT Newmont Pacific Nusantara, the Indonesian holding company of American mining giant Newmont Corp., has agreed to provide loans to the local governments of West Nusa Tenggara province and regencies of West Sumbawa and Sumbawa Besar to buy three percent stake in the company’s affiliate PT Newmont Nusa Tenggara (NNT).

 

“With the loans, the local governments will have the opportunity to own NNT shares,” Newmont Pacific Nusantara's President Director Martiono Hadianto told reporters on Monday.

 

The local governments of the West Nusa Tenggara province and West Sumbawa and Sumbawa Besar regencies are interested to buy the three percent stake in NNT worth about US$109 million after the central government rejected the offer.

 

However, the local governments did not have enough funds to pay the shares.

 

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.

 

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). (godang)