GOVT'S PLAN TO ACQUIRE NEWMONT STAKE DRAWS PROTEST

By Andi Abdussalam

Jakarta, April 18 (ANTARA) - The government's decision to acquire a seven percent stake in PT Newmont Nusa Tenggara (NNT) which operates the Batu Hijau mine, Indonesia's second-largest copper and gold mine in West Nusa Tenggara, is being opposed by the local people and the House of Representatives (DPR).         Thousands of West Sumbawa district civil servants and other locals took to the streets on Monday  and blocked roads  the mining location in protest against the central government's plan to buy the seven percent share in the firm. They demanded that the seven percent stake  be offered to the  government of West Sumbawa distict, West Nusa Tenggara province.      Deputy Chairman of DPR's Commission XI on financial affairs, Harry Azhar Azis, also criticized the government's move to acquire the company's shares before it was thoroughly deliberated with the House.         According to Harry Azhar Azis, Finance Minister Agus Martowrdoyo had violated an agreement with the House to hold further deliberations on the purchase of the NNT  shares.          He said that the finance minister and his commission had agreed to discuss the government's plan to buy NNT'S share after the completion of the House recess period early in May.          "If the government has decided to purchase the shares of NNT, it means that the minister has violated the agreement with the House," Harry said.          The Indonesian government, through the Government Investment Center (PIP) has bought seven percent of PT NNT's shares as part of the implementation of Article 24 of a work contract signed in 1986.          The seven percent purchase is the last phase of the divestment process of Newmont Nusa Tanggara in accordance with Article 24 of the work contract in 1986, according to Hadiyanto, the director general for state asset affairs of the Finance Ministry.          Newmont as a foreign firm has passed several phases of divestment process since 1996.          The law in Indonesia requires foreign companies in the mining sector to transfer 51 percent of their shares to the government or local companies after five years of commercial operation. So. NNT has the obligation to divest 51 percent of its stake.          But since PT Pukuafu Indah, a local company has owned 20 percent stake in it, the company is only required to gradually sell a total of 31 percent of its stake to the government or local parties.          However, both the government and NNT   were later involved in a dispute on how to implement the divestment scheme.  The international arbitration court ruled in favor of the Indonesian government, where NNT had to divest three percent shares for 2006 and seven percent stake for each year from 2007 through 2010.          Up to 2009, 24 percent of the divestment process had been carried out, leaving another seven percent in the last phase for 2010. The 24 percent divestment of Newmont's shares from 1996 to 2009 period  was held in 2009.          The share purchase was made by  the regional government through PT Multi Daerah Bersaing, a joint venture between PT Daerah Maju Bersaing (belonging to West Nusa Tenggara provincial administration and Sumbawa Barat district government) and Sumbawa district administration.          Hadiyanto said, PIP and Newmont were now in the process of finalizing the terms and conditions for the execution of the seven percent stake purchase.          However, Commission XI of  the House,  Harry said,  will question the finance minister's decision.  Harry who is a cadre of the Golkar Party faction said that the government should not have made a unilateral decision as it was related to the use of state money.          "The use of state money must be approved by the House. The question is that whether the funds that would be used to acquire NNT's shares had been included in the state budget," he said.          If the purchase of the shares had no allocation in the state budget while the minister went ahead with his decision, it meant that the minister had violated the law on state budget.          In the meantime, rallies held around Newmont Nusa Tenggar mining site, West Sumbawa district, on Monday did not disturb the firm's operation. NNT Public Relations Manager Kasan Mulyono said security officers ensured security so that Newmont remained in normal activities.          The mass rallies were held by thousands of civil servants, students and local people who demanded that the seven percent stake should be offered to the local government of West Sumbawa district.          Protesters happened to clash with security officers when they approached the mining complex but security officers were able to drive them back. A number of demonstrators were rushed to the nearest community health-care centers as a result of wounds.          West Sumbawa government called on NNT not to worsen the condition with statements that hurt the regional government and its people.           "The regional government hopes that its cooperation and partnership with the company should not be tarnished with accusations and statements which further worsened the relations," West Sumbawa regional government spokesman Najamuddin Amy said on Monday.          He said that the local people and the regional government had taken part in building the good investment climate so that it would become more conducive for the operation of PT Newmont Nusa Tenggara. "The people's rallies should not be seen as an act of terrors and anarchism that hampered investment," he said.          General Manager for Operations of NNT David Lilley earlier on Sunday expressed through a press statement his disappointment on the West Sumbawa district head whom he accused of having a plan to pressurize civil servants so that they would block the Batu Hijau mining location and to halt the operation of the firm.           "The district head's task is to enforce the law, ensure public order and support the economic development, not to carry out blockade that would halt the operations of NNT," David Lilley said.***5*** (T.A014/A/HAJM/17:20/a014) 18-04-2011 17:43: