Newmont, Sumitomo appeal Batu Hijau-related share divestment ruling
The Indonesian government says it is moving ahead with share divestment negotiations with Newmont Nusa Tenggara's foreign shareholders until a higher court rules on a judicial decision blocking the sale.
Posted: Wednesday , 08 Dec 2010
RENO, NV -
Newmont Nusa Tenggara, the parent company of the Batu Hijau copper-gold mine in Indonesia has filed an appeal to the country's Judicial Commission and the Supreme Court of a lower court ruling halting the divestiture of shares to local governments.
The statement, which appeared Tuesday in the Indonesian press, quoted Newmont Mining Vice President and Deputy General Counsel Blake Rhodes who asserted the South Jakarta District Court ruling contained procedural and legal violations.
Indonesian miner PT Pukuafu Indah, a shareholder in Batu Hijau parent PT Newmont Nusa Tenggara (PTNNT), had sued, claiming the largest shareholders, Newmont and Sumitomo, should have sold 31% of their shares to Pukuafu, which would have given the Indonesian mining company majority control of the Batu Hijau mine. Pukuafu bought a 20% stake in PTNNT in 1986.
PTNNT has to complete divesting 51% of its shares this year because it is now primarily owned by foreign companies.
The South Jakarta District Court ruled in favor of Pukuafu and awarded the company $27 million in monetary damages.
Newmont's Rhodes said Pukuafu's claims that it had paid for the shares are untrue and "an act of defamation." He contends that an arbitration court decision in 2009 held the Indonesia government holds the priority rights to buy the divested shares.
Meanwhile, Indonesia's Energy and Mineral Resources Ministry said last week the final 7% stake in PYNNY will proceed despite the recent court ruling. The head of legal and public relations at the ministry said the divestment will continue because the court decision is not binding because it is being appealed.
The Indonesia media said the ministry and PTNNT's foreign shareholders had agreed to a price of $271.5 million for the final 7% stake.
Batu Hijau is expected to yield between 310,000 to 340,000 gold ounces and between 250 million and 260 million pounds of copper this yea