Newmont's unit set to divest shares this year

Copper and gold miner PT. Newmont Nusa Tenggara (NNT) is set to offer 3 percent of its shares to Indonesian companies this year as part of mandatory divestment program stipulated by Contract of Work (CoW), a government official said.

Simon Sembiring, Director General of Mineral and Coal at The Ministry of Energy and Mineral Resources told Petromindo.Com that his office and NNT would negotiate to determine offering price for the shares.

Under the CoW, foreign shareholders of NNT is obliged to gradually divest at least 51 percent of NNT?s shares to Indonesian owned entities, starting with 15 percent 5 years after commercial operations (2005) and 8 percent the following year (2006). NNT is only obliged to divest 3 percent this year as local company PT. Pukuafu Indah (PI) has already controlled 20 percent of NNT?s shares. PI is controlled by Jusuf Merukh Family. The 51 percent divestment is expected to be completed in 2010.

NNT signed a 4th Generation of CoW with the Government of Indonesia in December 1986. Following ten years of exploration, a US$1.8 billion construction project commenced in early 1997 and finished in late 1999 followed by commissioning/start up. Commercial production started on 1 March 2000.

NNT?s Bata Hijau mine, which has ore reserves of 1 billion tons containing 0.525% copper and 0.37 gram per ton gold is producing around 600 million pounds of copper and 700,000 ounces of gold annually.

NNT is 45 percent owned by U.S mining giant Newmont Mining Corp, 35 percent owned by a consortium led by Japan?s Sumitomo, and 20 percent PI.

Industry sources told Petromindo.Com that PI is interested to buy the 3 percent shares. (godang)