by Karima Anjani
JAKARTA (Reuters)The Indonesian government said on Sunday that state investment agency Pusat Investasi Pemerintah (PIP) would buy a 7 percent stake in Newmont Mining Corp's Indonesian unit, paving the way for an initial public offering for the unit in coming months.
Denver-based Newmont and Japan's Sumitomo Corp are the majority owners of PT Newmont Nusa Tenggara (NNT), which runs the Batu Hijau copper and gold mine in West Nusa Tenggara province. PIP was finalising terms and conditions with NNT, including financing, payment and other technical aspects, the Finance Ministry said in a statement.
The 7 percent stake is worth about $272 million, as agreed by the Indonesian government and NNT late last year. Under the mining contract agreed with the government, foreign shareholders at NNT were supposed to sell a total stake of 31 percent gradually to local investors after they started production.
In 2009, an Indonesian arbitration court ordered the foreign shareholders to continue their divestiture after they failed to meet a deadline.
Previous stakes had been sold to PT Multi Daerah Bersaing -- a consortium of the governments of West Nusa Tenggara province, West Sumbawa regency and Sumbawa regency, where the mine is located -- and PT Multicapital, a unit of Bumi Resources Minerals . PT Pukuafu Indah, a local NNT shareholder, owns 20 percent.
Sources told Reuters in March that NNT was looking to raise about $500 million in a public offering by selling a 10 percent stake within 12 months.