The Indonesian government may delay the divestment of a 7 percent stake in the local unit of Newmont Mining Corp. following a Jakarta court ruling that disputed ownership of the shares, an official said.
“It may be hard to proceed with the divestment following the court ruling and appeal process by Newmont,” Witoro Soelarno, secretary to the director general of coal and minerals at the Energy Ministry, said in an interview in Jakarta today. “The shares are in dispute and it may affect the stake sale process and the result.”
The South Jakarta District Court ruled yesterday that PT Pukuafu Indah is entitled to the 31 percent stake in PT Newmont Nusa Tenggara that Newmont Mining subsidiary Newmont Indonesia Ltd., along with Nusa Tenggara Mining, a unit of Sumitomo Corp., are required to divest. The court also ordered Newmont to pay Pukuafu $26.6 million for material loss.
Pukuafu, which owns a 20 percent stake in Newmont Nusa Tenggara, filed a lawsuit in December 2009 seeking cancellation of an earlier ruling by an international arbitration court that ordered foreign shareholders of Newmont Nusa Tenggara to reduce their combined stake to 49 percent by 2010.
Newmont will appeal the Jakarta court ruling and is confident of it being reversed, Blake Rhodes, vice president and deputy general counsel of Newmont, said in a statement yesterday.
“The arbitration process was followed for the purpose of clarifying the Government’s and the foreign shareholders’ rights and obligations on divestiture,” Rhodes said. “Newmont Indonesia and Nusa Tenggara Mining properly divested 24 percent of Newmont Nusa Tenggara to the party nominated by the government.”
Newmont Nusa Tenggara, which operates the Batu Hijau gold and copper mine on Indonesia’s Sumbawa island, under a 1986 agreement, was required to offer 3 percent of its stake to the central government or its agencies in 2006, and 7 percent in each year from 2007 to 2010. PT Bumi Resources, through its venture with three local administrations in West Nusa Tenggara province, has bought a 24 percent stake through the divestment program. Officials from Bumi were not immediately available for comment.
Pukuafu ordered Newmont to transfer the 31 percent stake immediately, Tri Asnawanto, Pukuafu’s vice president of legal and external affairs, said by e-mail yesterday. Pukuafu is the unit of Merukh Enterprise Corp. controlled by politician and businessman Jusuf Merukh, which has interests ranging from hotels to gold, copper and to coal mines in Indonesia.