VANCOUVER — Newmont Mining (NYSE: NEM) indicated earlier this year that it was in talks to divest its Indonesian business unit to a consortium of local investors, and on June 30 it hammered out a US$1.3-billion deal with PT Amman Mineral Internasional (PT AMI).
The agreement marks the end of the U.S. company’s often turbulent investment in the southeast Asian country, which included semi-annual export permit renewals, arbitration claims, and potential involvement in the construction of a domestic smelter.
Newmont’s Indonesian crown jewel was the Batu Hijau copper-gold mine in the southwest region of the island of Sumbawa, which hit production in 1999 and averaged around 328,000 oz of attributable annual gold production.
The company agreed to sell its 48.5% stake in PT Newmont Nusa Tenggara (PTNNT) for cash proceeds of US$920 million and contingent payments of US$403 million tied to metal price upside and development of the Elang prospect. Newmont’s joint venture partner, Japan’s Sumitomo Corporation, also agreed to sell its ownership stake.
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