Govt to Seek House OK on Newmont Stake Purchase

By webadmin on 05:00 pm Aug 08, 2012
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Arientha Primanita

President Susilo Bambang Yudhoyono has ordered two members of his cabinet to seek approval from the House of Representatives regarding the purchase of a 7 percent stake in miner Newmont Nusa Tenggara.

Yudhoyono’s instruction came after the Constitutional Court last week barred the central government from unilaterally buying the stake in Newmont Nusa Tenggara, the local unit of the US mining giant Newmont.

“I have instructed the finance minister and energy and mineral resources minister to sit down and talk with the House,” Yudhoyono said in a press conference on Tuesday.

Finance Minister Agus Martowardojo decided last year to acquire a stake in Newmont. The move was opposed by the House, which said the purchase was a state budget appropriation requiring the legislature’s approval.

Lawmakers quickly made a motion against the central government, who brought the matter to the Constitutional Court. The court’s ruling, siding with the House, is final and binding.

NNT runs the country’s second-biggest copper and gold mine on Sumbawa island in West Nusa Tenggara province.

Last year’s move effectively shut out local governments in the province, which had also expressed interest in the stake purchase. They had the financial backing of Bakrie Group, owned by tycoon Aburizal Bakrie, who is also a 2014 presidential hopeful from the Golkar party.

Yudhoyono said the central and local governments must work together to find the best solution on the divestment. “If we do not proceed orderly, there are certain parties who would gain profit,” he said.

Amir Syamsuddin, the minister of justice and human rights, said the government would not question the court’s decision.

“The court stated we must ask [for the House’s] permission. No problem,” he said. “The House is not against the purchase per se. Rather, it considers the purchase as [part of] the state budget [requiring its approval].”

Under Newmont’s contract of work, the gold and copper miner is required to divest 51 percent of its stake in several stages.

The miner has sold 44 percent of its shares: 17.8 percent to local company Pukuafu Indah and 2.2 percent to Indonesia Masbaga Investama, as well as 24 percent to Multi Daerah Bersaing, a consortium owned by local governments and a Bakrie subsidiary.