Indonesia local govt, Newmont unit agree $391 mln stake sale

By Nurul Chayati MATARAM, Indonesia, Nov 6 (Reuters) - Three local governments in Indonesia will pay $391 million for a 10 percent stake in a local unit of Newmont Mining Corp., officials involved in the deal said on Friday. The decision should speed up the resolution of a divestment dispute between the government and the foreign owners of PT Newmont Nusa Tenggara, which runs the Batu Hijau copper and gold mine in Sumbawa island. "We agree to pay for the 10 percent stake within a year. We have signed the sales purchase agreement today," said Andi Hadianto, spokesman for the West Nusa Tenggara provincial government which is involved in the deal, in a telephone text message to Reuters. Hadianto is also a director of PT Multi Daerah Bersaing, a consortium made up of the governments of West Nusa Tenggara province, West Sumbawa regency and Sumbawa regency -- the three areas where the mine is located -- and financing firm Multicapital. A Newmont spokesman confirmed the terms of the divestment in a text message to Reuters. "The foreign shareholders will also pay $38 million as a goodwill gesture to the local governments which will be used for community development after the payment for the stake is completed," Newmont spokesman Rubi Purnomo said in his message. The value of the stake was in line with an arbitration court ruling at the end of March, although the local governments had been trying to negotiate a lower price. An arbitration court in late March ordered the foreign shareholders of PT Newmont Nusa Tenggara to sell part of their stake to local investors or to the government within six months, resolving a long-running dispute over ownership. The government and Newmont reached an agreement to extend the deadline to complete the sale of 24 percent stakes sale to Nov. 12 from an initial deadline in late September. For Q+A on Indonesia's dispute with the Newmont unit, click on According to the terms of a 1986 contract, the unit's foreign investors must sell 51 percent of the shares in the unit to local investors. Newmont and Japan's Sumitomo Corp own 45 percent and 35 percent respectively. A local mining group has already bought 20 percent. That means the foreign shareholders must still sell another 14 percent by Nov. 12, and the remaining 7 percent by the end of 2010. The foreign investors started offering more shares from 2006, but failed to sell them. Separately, in Jakarta, State Enterprise Minister Mustafa Abubakar said the government has appointed the consortium of local governments to buy the remaining 14 percent. "The local governments will lead the purchase," Abubakar said, adding that state miner PT Aneka Tambang Tbk will also be included in the consortium to represent the central government. (Additional reporting by Andreas Ismar and Fitri Wulandari in Jakarta, editing by Sara Webb) (([e-mail]; Reuters Messaging: [e-mail]; [phone] ext 904)) Keywords: NEWMONT INDONESIA/ (If you have a query or comment on this story, send an email to [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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