The Batu Hijau copper and gold mine is Newmont Nusa Tenggara’s only active concession in West Nusa Tenggara. (Photo: Reva Sasistiya, JG)
Multicapital to Back Local Newmont Bid
PT Multicapital, believed to be tied to the Bakri e group’s PT Bumi Resources, has been chosen to finance a bid by three local governments in West Nusa Tenggara for a stake in mining company PT Newmont Nusa Tenggara, officials said.
The governments of West Nusa Tenggara province and the districts of West Sumbawa and Sumbawa jointly established PT Daerah Maju Bersaing to buy shares of Newmont Nusa Tenggara, the local unit of US-based Newmont Mining.
DMB and Multicapital are expected to form a joint venture to pursue the shares.
On Sunday, DMB president director Andy Hadianto told the Jakarta Globe in an interview that DMB and Multicapital would seek to acquire a 31 percent stake in Newmont Nusa Tenggara that Newmont Mining is required by law to divest.
In a memorandum of understanding signed on Saturday, he said, the consortium and Multicapital agreed to split revenue from the stake 25 percent to 75 percent, respectively. However, the agreement will be nullified if Multicapital fails to draw up a contract within 14 days, he said.
“The contract will also state that the joint venture intends to acquire all of the shares that Newmont has to divest,” he said. “We are also interested in developing other Newmont concession areas [other than the main Batu Hijau mine], including Elang and Section 7.”
By law, Newmont Mining and other mining companies are required to gradually divest their stakes in local subsidiaries. In March, an international mediation panel ordered Newmont Mining to sell an overdue 17 percent stake in Newmont Nusa Tenggara to the government within 180 days, in addition to the 14 percent it should have divested in 2008.
Newmont Nusa Tenggara’s primary business is operating the Batu Hijau copper and gold mine in West Sumbawa, West Nusa Tenggara. It has four other concessions in the province, but only Batu Hijau is active.
Heryadi Rachmat, the head of the West Nusa Tenggara provincial mining department, said Multicapital was chosen because of its experience in the mining sector, its corporate social responsibility programs and the revenue split it offered.
Six companies were reportedly considered to finance the consortium’s bid. The others were UK-based Amstelco, PT Valco, PT Surya Energi Raya, PT Tambora Rinjani and PT Smawa Rea.
Surya Energi is owned by Golkar party politician and media magnate Surya Paloh.
Multicapital is said to be tied to Bumi Resources, one of a group of companies owned by the family of Coordinating Minister for People’s Welfare Aburizal Bakrie.
On Sunday, Bakrie group director Dileep Srivastava declined to comment when asked about Multicapital’s relationship to the group, instead saying that Bumi Resources would issue a statement on Tuesday.
A Multicapital spokesman could not be reached for comment as well.
Bambang Setiawan, the director general of coal, minerals and geothermal energy at the Ministry of Energy and Mineral Resources, said he would welcome the involvement of a Bakrie group company in Newmont Nusa Tenggara.
Newmont Mining public relations manager Kasan Mulyono declined to comment, saying the company had not received a formal announcement from the DMB consortium.
Divestment talks between the central government and Newmont Mining over Newmont Nusa Tenggara, which began in earnest in April, are said to be nearing completion.
Andy, the DMB president director, said the central government would announce today whether or not it would allow the local government consortium to buy a 14 percent stake in Newmont Nusa Tenggara meant to have been divested in 2008 and 2009.
But Bambang denied that a statement was imminent, saying that a valuation agreement would have to be reached first.
