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February 24, 2008

Govt, Freemont talks deadlocked

Indonesia and Newmont Mining Corp failed to reach agreement on a divestment plan Friday, according to a Reuters report. The talks had been closely watched by foreign investors and international mining firms.

Indonesian energy ministry gave Newmont until February 22 to fulfil its commitments, but the US mining giant said it needed more time. The two sides met for several hours on Friday but failed to agree over the order for Newmont to sell a 10 percent stake.

Earlier in mid-February, Indonesian government threatened to annul the contract of PT Newmont Nusa Tenggara, the Newmont unit which runs the Batu Hijau copper and gold mine in the Nusa Tenggara island, saying the company had not sold its shares quickly enough to local investors.

Newmont said that its shares in the local unit were pledged to a group of banks in 1997 as collateral against a $1 billion loan. As a result, it said, the shares could not be sold unless they continued to be pledged against the loan.

The company said it would continue discussion as there was no deadline. “All investment carried out by Newmont has been approved by the government, and the government has been aware of it," Rubi Purnomo, a Newmont spokesman, was quoted as saying.

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