An Indonesian group which includes prominent businessman Arifin Panigoro is preparing to buy a controlling stake in Newmont Mining’s Indonesian metals operations in a deal that could be valued at US$2 billion.
PT Newmont Nusa Tenggara owns the Batu Hijau project, which is Indonesia’s second largest copper and gold mine. Copper concentrate is shipped to a number of smelters in the country and overseas.
Newmont Mining Corporation owns 31.5% of the Indonesian entity with other stakeholders including Japan’s Sumitomo Corp and Jakarta-listed Bumi Resources Minerals, controlled by the family-owned conglomerate Bakrie Group.
Arifin Panigoro, founder of oil and gas firm PT Medco Energi Internasional Tbk, told the media of the planned acquisition on April 5 and said that the deal would be announced later in the week.
He said that Indonesian President Joko Widodo approved of the deal to buy the stake in the local Newmont unit as it was “in (the) national interest”.
Arifin Panigoro declined to disclose the size of the deal, but said it was aimed at business diversification.
In an emailed statement issued on April 1 by Newmont’s Indonesian unit, it said that Newmont and Sumitomo were in discussions with “certain interested parties” but “none has secured fully committed financing or final deal terms” at this time.
The Batu Hijau mine is in the southwest region of the island of Sumbawa, in the District of Sekongkang, West Nusa Tenggara Province. Originally discovered in 1990, commercial production began in 2000.