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NEWS UPDATES 3 July 2009

Indonesia extends Newmont divestment negotiations

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Indonesian government has again extended the time for negotiations on divestment of 14 percent of PT Newmont Nusa Tenggara (NNT)`s shares for an undetermined period, reported state news agency Antara.

The government was still optimistic it cab arrive at a deal with Newmont, Bambang Setiawan, the energy and mineral resource ministry`s director general for mineral, coal and geothermal affairs, was quoted as saying Thursday.

"We are optimistic that within the next one or two days , there will be a deal," he said.
The negotiations` deadline had earlier been extended twice, namely on June 15, 2009, and July 2, 2009.

With the extension, the appointment of an independent assessment team to calculate the value of divestment shares would also be postponed, he said.

However, the government was optimistic that the NNT share divestment would be completed before the final deadline in accordance with the arbitration coutr`s ruling, namely September 2009, he said.

In addition to the negotiations, the government was also preparing the execution of a default ruling on NNT through the South Jakarta District Court.

The government and Newmont have been negotiating divestment share prices of 2008 and 2009 respectively at seven percent, or 14 percent in total.

Newmont has offered its asset value at $4.9 billion, while the Indonesian government has offered 2/3 of the asset price.

Under a 1986 contract, Newmont must gradually sell 31 percent of its stake in NNT to the government or local parties it will appoint in 2010.

Last year, NNT and the government went through an international arbitration procedure following a dispute on how to implement the divestment scheme.

The court ruled in favor of the Indonesian government. Under the international arbitration court ruling, Newmont is required to sell 17 percent of its stake which was supposed to be carried out in the 2006-2008 period.

The government and NNT have reached an agreement for the divestment of 3 percent worth $109 million of the company`s shares for 2006 with assets valued at $3.63 billion, and 7 percent worth US$282 million for 2007 with assets estimated at $4.03 billion.


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