Newmont to divest Indonesia mine stake

Newmont to divest Indonesia mine stake

Newmont Mining Corp., the world’s second-largest gold miner, plans to divest a further 7 percent stake in its Batu Hijau copper-gold mine in Indonesia and offered the shares to the government for about $325 million.

“We’ve made the offer, based on a value of $4.65 billion for the mine,” Newmont spokesman Rubi Purnomo said in Jakarta on Wednesday.

The offer to the government is part of Newmont’s plan to reduce its stake by March 2008, Mangantar Marpaung, the Indonesian energy ministry’s director for coal and mineral-resources development, said in a phone text message from Beijing.

Batu Hijau is the only productive mine in Indonesia for Denver-based Newmont Mining. The stake sale is part of a divestment schedule mandated by Indonesian law to place a greater share of the unit, PT Newmont Nusa Tenggara, in the hands of local investors.

Newmont and Sumitomo Metal Mining Co., Japan’s second-largest copper smelter, hold the combined 80 percent stake in Newmont Nusa Tenggara, which operates the mine. Newmont is negotiating to sell an additional 3 percent stake for $109 million, which is also part of the divestment, Purnomo said.

The mine is in Sumbawa Barat province, about 700 miles east of the capital, Jakarta. Batu Hijau is forecast to produce 210 million to 230 million pounds of copper this year and 230,000 to 250,000 ounces of gold, Newmont said Feb. 23.

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