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After lengthy negotiations, the divestment process of mining
firm Newmont Nusa Tenggara (NTT) is now back on track as local
governments agree to purchase the company's shares through a
business-to-government scheme.
Facilitated by the Investment Coordinating Board (BKPM), Newmont
representatives and officials from three local administrations met
Tuesday to settle the differences they had over the divestment process.
"During the meeting, they (the local administrations) indicated their
intent to buy the shares. They said they were willing and ready," BKPM
chairman M. Luthfi said.
He believed the deals could be finalized soon.
Newmont spokesman Martiono Hadianto declined to provide any details.
During the meeting, West Sumbawa regency agreed it would buy 3 percent
of the shares, which were originally meant to be divested in 2006.
Newmont would also divest 7 percent of its stakes to be jointly managed
by the West Nusa Tenggara provincial administration and Sumbawa
regency, Luthfi said.
"All parties have agreed we stick to the previous official scheme,
which was a negotiation between the company and the government," he
said.
"Through such a scheme, the price (of the shares) should comply with
the pricing scheme set by the Ministry of Energy and Mineral Resources."
Lutfhi was referring to the government-set price of US$109 million for
the 3-percent stake and $282 million for the 7-percent stake.
The prices were based on previous negotiations between the central
government and Newmont.
Tuesday's deal is expected to end uncertainty over the Newmont
mandatory divestment program, under which the company is required to
sell up to 51 percent of its shares to local investors by 2010.
Negotiations were stalled after both parties had different perceptions
of the divestment process and the local administrations insisted on
including private investors in the negotiations.
Newmont, on the other hand, demanded the negotiations exclude private
entities.
It was earlier reported that West Sumbawa regency would team up with PT
Tambang Sumbawa Barat to buy a 3-percent share, while the West Nusa
Tenggara provincial government and Sumbawa regency named PT Bumi
Sumbawa Emas as their partner.
Newmont previously said it had planned to invest up to $600 million
this year to maintain production.
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