GOVT WANTS SAME PRICE FOR 2008, 2009 NEWMONT DIVESTMENTS

Jakarta, April 28 (ANTARA) - The government wants the same price for the 2008 and 2009 divestments of PT Newmont Nusa Tenggara (NNT), Director General for Mineral, Coals and Geothermal Affairs Bambang Setiawan said.

"The divestment price offered by NNT for 2008 is rather high," the director general said after accompanying Minister of Energy and Mineral Resources Purnomo Yusgiantoro to receive Rajawali Group owner Peter Sondakh here on Tuesday.

He said that the government had asked NNT to propose the same divestment price for 2008 and 2009, saying the price for 2008 was too high. NNT has previously offered a 7 percent divestment price of US$426 million for 2008 and another 7 percent worth US$347 million for 2009.

The director general said the government was also discussing a reasonable price for the divestment of Newmont.

Mining observer Pri Agung Rakhamanto said PT Newmont Nusa Tenggara (NNT) shareholders' claim the company's assets were worth US$4.9 billion was exaggerated.

He said that based on the annual report of NNT in 2008, the value of total assets of Newmont Mining Corporation (NMC) --the holding company of NNT-- was only US$15.839 billion. The value of NMC's assets in Indonesia, including that of NNT and PT Newmont Minahasa Raya (NMR), is about 17 percent (of the US$15.839 billion).

"With that reference, the combined value of NNT and NMR's assets is only about US$2.693 billion," Rakhmanto said.

NNT has conducted an expose in front of a divestment price team formed by the government where it claimed NNT assets were worth US$4.9 billion.

With assets worth US$4.9 billion, the price of seven percent of the stake in the divestment of the firm in 2009 would be US$348 million, or similar to the amount offered previously.

Based on a 1986 contract, the company is required to gradually sell a total of 31 percent of its stake to the government or local parties it appoints.

In Indonesia, foreign mining companies are required to divest up to 51 percent of their shares to local parties after five years of commercial production.

But since PT Pukuafu Indah, a local company, has owned 20 stake in it, NNT is required to divest only 31 percent. Newmont and the government have gone through an international arbitration court to following a dispute on how to implement the divestment scheme.

The international arbitration court on March 31, 2009, ruled Newmont must sell a mandatory 17 percent stake in PT Newmont Nusa Tenggara (NTT) to the government within 180 days.***2***