The government has softened its stance in the Newmont Mining saga by offering a combined quarter of a 7 percent stake in Newmont Nusa Tenggara to the local administrations in the region where the firm’s lucrative copper and gold mine is located.
Much of the NNT’s divestment debate centered on the regional and local administrations vying for the stake, which is valued at $246.8 million.
The West Sumbawa district administration welcomed the government’s plan, while the West Nusa Tenggara provincial administration was yet to announce its view on the offer of the 1.75 percent stake — equivalent to $61.7 million — in NNT, which is a local unit of Colorado-based Newmont Mining.
The central government will finish the 7 percent stake purchase, and then offer a quarter each to the regional governments.
The Finance Minister Agus Martowardojo said the regional administrations could pay the central government for their 1.75 percent stakes in installments via dividend payments from NNT. However, Agus said the regional governments had to be the sole purchaser of the stakes, leaving no room for private companies to be involved.
Pukuafu has claimed that it was given the rights to 31 percent of NNT’s divestment share, but NNT says that it never made such a deal. NNT has called for a speedy resolution to the disputes, saying that the longer it takes for the government to get its hands on the shares, the longer dividends will not be paid. Under Newmont’s 1986 working contract with the government, NNT is required to divest 51 percent of its shares to Indonesian entities by 2010. Domestic companies now hold 44 percent of the miner’s local unit.
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