NHN shares should not be entirely sold to foreign investors

PT Newmont Horas Nauli (NHN) shares should not be entirely sold to foreign investors to ensure the national interest in the company's Martabe mining site in South Tapanuli regency, North Sumatra, a senior mining official has said.

Director for mineral and coal mine supervision at the ministry of energy and mineral resources, M.S. Marpaung, said in Jakarta that the national interest in the Martabe mining site should be retained.

"The national interest should be retained in the mining company. NHN's shares should not therefore entirely sold to foreign investors," he was quoted as saying by Bisnis Indonesia.

Newmont is planning to dispose of its 90 percent shares in Martabe gold mine because the project?s reserves were too small for a big company like Newmont to manage. Newmont has 90 percent stake in PT NHN which operates the project. The remaining balance is held by the Tahija family through PT Austindo Nusantara Jaya.

Several overseas and Indonesian companies, including state nickel and gold miner PT Aneka Tambang; a company that is controlled by Indonesian mining magnate Jusuf Merukh; UK?s Avocet Mining; Australia?s Kingsgate Consolidated Mining and Emperor Mines Limited are competing to acquire Newmont Mining Corp?s 90 percent stake in Martabe gold project.

Pre-feasibility study on the gold project conducted by previous owner Normany Mining in 2002 revealed that high returns from the project could be achieved from a heap or dump leach operation for a low entry capital of approximately US$30 million and operating cost of approximately US$105/oz, with an indicative average annual production of 150,000ozs (*)