M&A

18 November, 2009

UPDATE 1-Indonesia: Antam won't buy shares in Newmont unit

(Adds details, quotes)

JAKARTA, Nov 18 (Reuters) - Indonesia's state-owned miner PT Aneka Tambang Tbk (ANTM.JK) will not join a consortium buying divested shares in a local unit of Newmont Mining Corp. (NEM.N) given the stake on offer is too small, a senior government official said on Wednesday.

An arbitration court in late March ordered the foreign shareholders of PT Newmont Nusa Tenggara (PT NNT) 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 agreed last week to an extension to Nov. 23 to complete the sale of another 14 percent stake worth $493.6 million after Aneka Tambang Antam dropped a plan to join a consortium of local governments. [ID:nJAK486310]

However, Indonesia's chief economics minister Hatta Rajasa had said on Tuesday the government was still keen for Antam to take part. [ID:nJAK422108]

"We tried again to follow up on the possibility for Antam to join, but none of the schemes offered by the local governments were in line with Antam's corporate strategy," Bambang Setiawan, director general of mining at the energy and mining ministry, told reporters after a meeting discussing the divestment.

Setiawan said that the government expected Newmont and local governments to wrap up the sale process this week.

Antam wanted to buy 15.5 percent of PT NNT, but was offered a much lower percentage.

Antam's president director Alwin Syah Loebis declined to comment.

Foreign shareholders in PT NNT, which runs the Batu Hijau copper and gold mine on Sumbawa island, late on Monday completed the sale of a 10 percent stake sale.

The 10 percent stake worth $391 million had been transferred 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 financing firm PT Multicapital.

According to the terms of its 1986 contract, PT NNT's foreign investors must sell 51 percent of the shares in the unit to local investors. Newmont and Japan's Sumitomo Corp (8053.T) own 45 percent and 35 percent respectively.

A local mining group has already bought a 20 percent stake.

With the latest stake purchase, the foreign shareholders must still sell the remaining shares by the end of 2010.

The foreign investors started offering shares from 2006, but failed to sell them, sparking the dispute with the government.

Shares in Antam were trading up about 1 percent at 2,450 rupiah by 0715 GMT, halving their earlier gains although outperforming a 0.32 percent gain in the broader market .JKSE.

For a Q+A on Newmont dispute, click on [ID:nJAK465121] (Reporting by Fitri Wulandari; Writing by Tyagita Silka; Editing by Ed Davies)

Source: http://www.reuters.com