Six state firms will buy Newmont shares

As many as six state owned companies have agreed to buy five percent of Newmont Nusa Tenggara?s shares which would be sold by the mining company to meet the mandatory divestment requirement, Bisnis Indonesia reported on Tuesday.

Deputy of State Enterprises Minister Gatot Trihargo said in Jakarta on Monday that six state firms including PT Danareksa and PT Perusahaan Pengelola Aset had agreed to set up a consortium to buy the shares. He, however, said that these state firms would need approval from the finance minister to buy the shares.

The shares would be part of the remaining seven percent that have to be divested by Newmont to meet the mandatory divestment requirement. Gatot said that the other two percent would be offered to the local government.

The finance minister and Newmont signed an agreement in May, 2011 on the sale of the shares. Under the agreement, the government agreed to buy the seven percent shares for US$246.8 million or about Rp 2.3 trillion. But the purchase has been delayed due to the opposition from the House of Representatives.

Under their contract of works signed in 1986, Newmont Nusa Tenggara must divest 31 percent of its total shares to local companies in order to meet the mandatory divestment requirement. The 24 percent of their shares have been sold to PT Multi Daerah Bersaing, a joint venture of PT Multicapital, a business unit of coal giant PT Bumi Resources.

Mining companies, which signed their contract of works in 1980s, are normally requested to divest 51 percent of their shares to local companies after five years of their commercial operations. But, Newmont needs to divest only 31 percent because 20 percent of the total shares have already owned by their local partner. (*)