Newmont warned to complete divestment of its stake
Saturday, December 15 2007 - 02:18 AM WIB
The ministry's Director General of Mineral, Coal and Geothermal Simon Sembiring, said in Jakarta Friday that his office and NNT were still negotiating to settle the divestment of the company's shares before the end of this year.
He said that if the divestment of the ten percent stake could not be completed before the end of this year, the ministry would issue a default status to the company. The government would then give the company 180 days to settle the divestment, he said.
"If the company is still unable to complete the divestment within 180 days, the company will issue a second warning. If the company still does not heed the divestment program, the government will terminate its contract over its copper and gold mining area in Sumbawa, West Nusa Tenggara," he said.
The conflict between the ministry and NNT rises due to differing perceptions over the status of the divestment of the company's shares.
But NNT refuses to use the official price tag on the ground that the buyers comprise not only the local governments as earlier planned but also a private company. According to NNT with the involvement of the private company, the price should be based on business to business negotiation.
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 March 2008, the company should divest 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). (godang)