Jakarta. Medco Energi Internasional, Indonesia’s largest listed oil and gas company, plans to acquire 76 percent of gold miner Newmont Nusa Tenggara, a unit of US mining giant Newmont, for an estimated $2.2 billion by next month.
Tycoon and Medco owner Arifin Panigoro told Coordinating Minister for Maritime Affair Rizal Ramli on Wednesday about the plan, as the company seeks to expand beyond oil and gas businesses.
“Arifin’s initiative is very good. It shows that a national entity can buy and manage a large scale mine,” Rizal. “This is significant because [Indonesia] have been long perceived of not being capable of managing such assets.”
Arifin expects to buy the stakes from Sumitomo and Pukuafu Indah, with an eye to completing the acquisition by the end of December. He committed to honoring the NTT arrangement to process gold and copper ore domestically.
Newmont Mining and Japanese conglomerate Sumitomo owns respective 31.5 percent and 24.5 percent of the local miner through special purpose vehicle Nusa Tenggara Partnership.
Multi Daerah Bersaing, a local government consortium backed by the Bakrie group, owns 24 percent and local firms Pukuafu Indah and Indonesia Masbaga Investama owns a respective 17.8 percent and 2.2 percent.
Arifin did not elaborate further on plans for the remaining stakes.
NNT spokesman Rubi Purnomo did not return calls regarding the issue.
M Hidayat, director of mineral mining at Energy and Resources Mineral Ministry, said that the ministry has yet to be informed of the plan and Medco will need ministry approval for the acquisition.
“We plan to build a smelter with a capacity of 500,000 tons, as preparation for anticipated production in [Elang] block,” Arifin said, referring to NNT’s undeveloped block in its Batu Hijau mine area.
NNT has been struggling to comply with the 2009 law regarding domestic mineral processing, causing delays to its export. Currently, the company plans only to develop copper smelter in the country with Freeport Indonesia, the country’s biggest copper and gold miner.
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