Mon, 12 May 2003

Newmont to begin divestment in 2006

A'an Suryana, The Jakarta Post, Sumbawa, West Nusa Tenggara

The foreign shareholders of copper and gold mining company PT Newmont Nusa Tenggara will start selling a 3 percent stake in the company in 2006.

Company public relations manager Kasan Mulyono said last week that the divestment was part of an obligation to unload a total of 51 percent shares to local investors by 2010.

According to a contract signed with the government in 1986, the foreign shareholders must start divesting their shares six years after the mining operation started in 1999.

Newmont Nusa Tenggara is 45 percent owned by U.S.-based mining giant Newmont Mining Corp., 35 percent owned by a consortium led by Japan's Sumitomo, and 20 percent by local investor PT Pukuafu Indah.

Based on the contract, the foreign shareholders must divest a 15 percent stake in 2005, and 8 percent in the following year. But because local investors through Pukuafu already own a 20 percent stake, the divestment obligation (of a 3 percent stake) will start in 2006. The divestment of the remaining 28 percent shares will be conducted in stages from 2007 until 2010.

Newmont operates a mining concession in the Batu Hijau area of Sumbawa regency, West Nusa Tenggara province.

Last week a group of journalists visited the mining site, which has proven reserves of 11 billion pounds of copper and 12.3 million ounces of gold, according to Newmont Mining Corp.'s 2002 unaudited financial report.

For 2002, copper sales totaled 673.8 million pounds and gold 515,200 ounces.