ASEAN KEY DESTINATIONS
Indonesia to assess Newmont unit's value to speed up stake sale
Indonesia plans to appoint an independent appraiser to assess the value of the local unit of Newmont Mining Corp (NEM.N) in order to speed up a divestiture sale, the energy and mining minister was quoted by Reuters as saying Friday.
An arbitration court in late March ordered the foreign owners of PT Newmont Nusa Tenggara, which operates the Batu Hijau copper and gold mine in Sumbawa island, eastern Indonesia, to sell a 17 percent stake to the government within six months, after a long-running running dispute.
A resolution of the case is seen by analysts as crucial for Indonesia's plans to attract foreign investment into sectors such as mining to drive economic growth and create jobs.
The government and PT Newmont Nusa Tenggara had failed to reach an agreement on the unit's share prices after intensive discussions, with wide differences between both sides on the valuation, minister Purnomo Yusgiantoro said.
"In a negotiation, a seller always wants a higher price and the buyer wants a lower. But this won't get us anywhere," Yusgiantoro told reporters.
"We have a deadline to meet, so to speed things up, we are in the process of appointing an independent appraiser," he said, but declined to identify the proposed appraiser.
Officials of Newmont in Indonesia were not immediately available for comment. Under the terms of the contract, foreign investors in PT Newmont Nusa Tenggara must sell 51 percent of the shares in the unit to local investors.
PT Pukuafu Indah, an Indonesian mining group, previously bought 20 percent. Newmont and Japan's Sumitomo Corp own 45 percent and 35 percent respectively.
The foreign investors began offering NNT shares for sale in 2006, initially offering a 3 percent stake for $109 million. The following year it offered a 7 percent stake worth $282 million, and another 7 percent stake worth $426 million in 2008.
The independent appraiser was expected to come up with an agreed price by next month, Yusgiantoro said.
"Then we can report the result to the finance ministry and determine whether the government will purchase the shares or not," he said. Indonesia's finance ministry has first right of refusal on all the share sales.
Comment on this Article. Send them to email@example.com
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below