No Preferences for Potential Investors on 7 Percent Stake, Local Newmont Spokesman Says

By webadmin on 01:39 pm Aug 04, 2012
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Tito Summa Siahaan

Newmont Nusa Tenggara, the local unit of US mining giant Newmont, said on Friday that the company neither had any preferences nor had it received any proposals from interested investors to buy a 7 percent stake.

Rubi Purnomo, an NNT spokesman, said the change of ownership in the miner would not affect the company’s plan for an initial public offering.

Foreign shareholders have shown their commitment to abide by the contract by offering a combined 51 percent to be divested to the local government, Rubi said on Friday after holding a fast-breaking ceremony. Martiono Hadianto, president director of NNT, did not show up at the ceremony in Jakarta as he had a meeting with Energy and Mineral Resources Minister Jero Wacik.

“We are waiting for a directive from the government regarding future measures on the divestment,” Rubi said, adding that NNT wanted to see an agreement in the ongoing divestment saga as soon as possible.

Asked whether Newmont had any preference, Rubi said the provision within its working contract required the foreign investors to sell to the Indonesian government and that the company’s initial public offering would hinge on divestment.

He did not provide any specific terms on the IPO.

The country’s lawmakers, including Harry Azhar Azis, a Golkar Party legislator and deputy chairman of House of Representatives Commission XI, which oversees financial affairs, called for the West Nusa Tenggara provincial government to buy the 7 percent stake in NNT after the Constitutional Court blocked the central government from purchasing the divested shares in the miner.

Harry has called on President Susilo Bambang Yudhoyono to order Jero to handle the sale.

The 7 percent stake of NNT is valued at $246.8 million, the amount that the government and NNT agreed to in a deal last year.

Tri Budi Prayitno, a spokesman for the West Nusa Tenggara provincial government, said on Wednesday that the latest ruling by the Constitutional Court suggested that the regional government would be allowed to team up with local companies to buy the stake. He did not provide further details.

An agreement made in 1986 required NNT to offer the central government or its agencies a 3 percent stake in 2006 and 7 percent more each year from 2007 to 2010.

Regulations had mandated that 10 years after the start of production at a foreign-controlled mine, the foreign company must divest a 49 percent stake to the benefit of Indonesian companies.

NNT is 56 percent controlled by Nusa Tenggara Partnership BV, a consortium of Newmont Indonesia and Nusa Tenggara Mining. The rest is owned by Multi Daerah Bersaing (24 percent), Pukuafu Indah (17.8 percent) and Indonesia Masbaga Investama (2.2 percent).