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NEWS UPDATES Asean Affairs            16  July 2011

Indo government to investigate US miner

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The government will investigate the divestment of a 2.2 percent stake in gold miner Newmont Nusa Tenggara to Indonesia Masbaga Investama on allegations that a bogus company was formed to secure majority ownership for US giant Newmont Mining.

The probe may delay completion of divestment of a 7 percent stake in the mine to the national government.

"There's suspicion that IMI was funded by Newmont Mining so that Newmont could retain those votes after it completes its divestment," Kardaya Warnika, the a spokesman for the Energy and Mineral Resources Ministry, said on Friday.

"We have decided to investigate to determine whether the suspicion is true," Kardaya said. The spokesman did not provide a time frame for the conclusion of the investigation.

In the 1986 contract of work for Newmont's Batu Hijau mine in Sumbawa, West Nusa Tenggara, it was stipulated that the US miner and Japanese partner Sumitomo would have to sell down the foreign-owned stake until a majority, or 51 percent, of shares were held by Indonesian entities by 2010, with the goal of ending foreign control of natural resource projects.

However, Newmont has so far divested only 44 percent of NNT shares to Indonesian companies, leaving the remaining 7 percent unsold. Several local entities are now vying for the stake.

Recent media reports allege that IMI received funds from Newmont Mining to buy a 2.2 percent stake in NNT from Pukuafu Indah, which is owned by Merukh Enterprises, a conglomerate in the mining sector, so that it could collaborate with Newmont Mining in shareholder voting.

"That means that Newmont did not fulfill the requirement [in the contract of work] to divest at least 51 percent of ownership," Kardaya said.

IMI's owners are purported to include a Catholic foundation called Sanata Dharma and an engineering school, Karya Akademi Tehnik Mesin Industri.

Last month, Martiono Hadianto, president director of NNT, confirmed to local media that Newmont had provided a soft loan for IMI to purchase its shares. He responded to allegations of collusion by saying that this did not mean that Newmont had any influence over how IMI would vote its shares in the mining company.

"IMI still has its own financial rights based on the 2.2 percent stake," Martiono said in a special meeting with reporters on June 17, convened to respond to public suspicions. "So, it has nothing to do with Newmont."

NNT is trying to complete its divestment obligation by divesting the last 7 percent to the central government.

A sales purchase agreement, which valued the stake at US$246.8 million, a 10 percent discount from the initial valuation, was signed in May. The money has yet to be paid, however, pending endorsement from the Energy Ministry and clearance from the Investment Coordinating Board (BKPM).

 


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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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