DEADLINE OF NEWMONT STAKE PURCHASE EXTENDED AGAIN

By Andi Abdussalam

Jakarta, Aug 7 (ANTARA) - The purchase deadline for seven percent of PT Newmont Nusa Tenggara (NNT)'s divested shares was extended for the third time on Monday, after a Constitutional Court's ruling directing the government to get the House's approval.          An earlier deadline for the deal was set for March 18, 2011, which was extended to May 6, 2012. This deadline was extended again on Monday to October 25, 2012.          The sale of seven percent of NNT's shares is the last phase of the company's divestment process, which was expected to conclude in 2010.          The sale of the seven percent stake is part of the 31 percent shares NNT has to divest. The transaction has been delayed three times due to an inconclusive debate on whether the Indonesian government needs to get the deal approved by the DPR.       Meanwhile, the local government of West Nusa Tenggara (NTB) has also been trying to acquire these shares.          Indonesian laws necessitate 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.          Based on these laws, NNT is obligated to gradually divest 31 percent of its stake to the government or local companies.          NNT has undergone several phases of divestment since 1996. 24 percent its stake was divested by 2009 and the remaining seven percent was supposed to have been sold in the last phase in 2010.          In December 2010, the Indonesian government struck a deal with NNT for the purchase of the remaining seven percent stake through the Government Investment Center (PIP), without the approval of the House of Representatives (DPR).          The State Audit Board (BPK) also agreed with the DPR and said that the government needs to get the House's approval because it plans to fund the deal with capital sourced from the state budget.          This public disagreement between the government and the DPR has resulted in the sale deadline being extended thrice.          "We signed an agreement amending the deadline for the purchase of the stake today," Ruby Purnomo, head of the Communications Department at NNT said on Monday.           He added that the Constitutional Court (MK) had rejected the government's request for a legal review of the regulation which requires it to seek the House's approval for purchasing the NNT stake last week.           Despite the MK ruling, the central government still has a chance to acquire the NNT stake, but then so does the NTB regional government, which has also expressed an interest in buying the shares.          As with the earlier divestment of NNT's stake, the government had assigned the PIP to act on its behalf and sign the Sales Purchase Agreement (SPA) with NNT.          "The current deadline for the purchase of the 2010 divestment stake is October 25, 2012," Purnomo said, adding that the government had agreed to make the go ahead with the deal on December 17, 2010 and set March 18, 2011 as the deadline.          At the time, the government valued the seven percent stake at US$271.6 million, or about Rp2.5 trillion, but was unable to decide whether it should be sold to the NTB regional government, other national private companies or the central government itself.          But the open disagreement between the MK and the DPR on one side and the government on the other  has derailed the divestment process. The BPK supports the House as the PIP intends to use state budget funds for the deal.          The NTB local government has also been fighting for its right to purchase NNt's shares.          The House has also asked the Ministry of Energy and Mineral Resources to allow the NTB regional government to buy the seven percent divested stake of NNT, which operates the Batu Hijau mine, Indonesia's second-largest copper and gold mine in West Nusa Tenggara.          Whether the central government succeeds in buying the stake or not depends on its getting the House¿s approval, as directed by the Constitutional Court.          "The government indeed has the authority to purchase seven percent of PT Newmont¿s shares, but it must do so with the DPR's approval," Constitutional Court Chairman Mahfud MD said.          He said the government had to postpone its plan to purchase PT Newmont Nusa Tenggara shares pending an approval from the House of Representatives.          He added that taking the decision to use investment funds to purchase NNT¿s shares was part of the Finance Ministry's mandate, but the plan to buy the shares worth Rp 1 trillion through the PIP and including that expenditure in the 2011 budget cannot be done without the DPR's approval.         "The plan must be discussed first with the DPR to determine possible risks that will be jointly borne," Mahfud said.     Legislator Zaini Rachman of the DPR¿s Commission XI on financial affairs has also asked the Finance Minister to abide by the MK ruling.         In wake of the Constitutional Court's ruling, the finance minister should refrain from violating the law again, Rachman said.          "The House Commission XI asks the minister to respect the MK ruling," he said.          He added that the NTB regional government should also be given a chance to bid for NNT's stake.          Finance Minister Agus Martowardojo said he respects the MK decision. "Of course we have to respect the Constitutional Court decision. I will take time to study the decision with the government."     He said he will also consult the Ministry of Legal Affairs and Human Rights about the possibility of a filing an appeal against the Constitutional Court's ruling. ***2*** (T.A014/INE/a014) (T.A014/A/KR-BSR/A/A014) 07-08-2012 19:11