Newmont Nusa Tenggara’s long-awaited divestment has gone into overtime, with the government calling for an extension after a deal failed to materialize before the Monday deadline.
The Ministry of Energy and Mineral Resources said on Tuesday that it had received a 30-day extension on the plan, which pitted the central and local administrations against each other.
“First, we need more time for the divestment process, and second, there is a demand from [West Sumbawa and West Nusa Tenggara], which we will study so that it won’t create conflict in the future,” said Kardaya Warnika, a ministry adviser.
Under the 1986 contract between the company, also known as NNT, and the state, the miner was required to divest 51 percent of its equity by 2010, but a 7 percent stake valued at $271.6 million remains. NNT controls the Batu Hijau gold and copper mine.
Najamudin Amy, the West Sumbawa district spokesman, said on Tuesday that the district head was in Jakarta to negotiate with NNT and the government.
“The people of West Sumbawa hope that NNT’s management can be more cooperative in understanding the people’s desire, and the central government should understand the spirit of decentralization,” he said.
“Shouldn’t development at the local level reflect the welfare of the country? This is an effort to minimize central-local development disparity,” Najamudin said. “[The district head] is trying to unlock the resources potential for the good of his people.”
Muhammad Zainul Majdi, the governor of West Nusa Tenggara, was also in the capital to secure the shares.
The central government wanted the shares to “bring good corporate governance and good management principles to the company as stated in the working contract,” Finance Minister Agus Martowardojo said in March.
When contacted by the Jakarta Globe, NNT commissioner Kurtubi said he supported the local bids. “The mine is located in Sumbawa, not Monas [the National Monument],” he said.
“The government has enjoyed trillions from its taxes, meanwhile West Nusa Tenggara received much less than that. The central government should understand that the regions need it more than they do,” he said.
Last year, the miner paid Rp 5.76 trillion ($660 million) in taxes and royalties to the central government, while the provincial administration received just Rp 200 billion in NNT dividends.
“The central government should understand that the poverty rate in West Nusa Tenggara is 23 percent, higher than the 13 percent national average,” said Kurtubi, who represents the interests of Multi Daerah Bersaing, the Bakrie-led consortium that holds a stake in the miner.
Meanwhile, NNT spokesman Rubi Purnomo said on Tuesday that the company was ready to cooperate with the State Investment Agency (PIP) to complete the deal.
But lawmakers on Friday said PIP was financed by the state budget, which would violate the government’s vow not to use state funds for the deal. West Nusa Tenggara is still courting investors for a consortium to acquire the shares, while West Sumbawa claimed backing from a relatively mysterious firm called Titan Metals.
Local protests over the divestment turned violent on Monday as thousands of people demanded the central government leave the shares to West Sumbawa.
The Ministry of Energy and Mineral Resources said on Tuesday that it had received a 30-day extension on the plan, which pitted the central and local administrations against each other.
“First, we need more time for the divestment process, and second, there is a demand from [West Sumbawa and West Nusa Tenggara], which we will study so that it won’t create conflict in the future,” said Kardaya Warnika, a ministry adviser.
Under the 1986 contract between the company, also known as NNT, and the state, the miner was required to divest 51 percent of its equity by 2010, but a 7 percent stake valued at $271.6 million remains. NNT controls the Batu Hijau gold and copper mine.
Najamudin Amy, the West Sumbawa district spokesman, said on Tuesday that the district head was in Jakarta to negotiate with NNT and the government.
“The people of West Sumbawa hope that NNT’s management can be more cooperative in understanding the people’s desire, and the central government should understand the spirit of decentralization,” he said.
“Shouldn’t development at the local level reflect the welfare of the country? This is an effort to minimize central-local development disparity,” Najamudin said. “[The district head] is trying to unlock the resources potential for the good of his people.”
Muhammad Zainul Majdi, the governor of West Nusa Tenggara, was also in the capital to secure the shares.
The central government wanted the shares to “bring good corporate governance and good management principles to the company as stated in the working contract,” Finance Minister Agus Martowardojo said in March.
When contacted by the Jakarta Globe, NNT commissioner Kurtubi said he supported the local bids. “The mine is located in Sumbawa, not Monas [the National Monument],” he said.
“The government has enjoyed trillions from its taxes, meanwhile West Nusa Tenggara received much less than that. The central government should understand that the regions need it more than they do,” he said.
Last year, the miner paid Rp 5.76 trillion ($660 million) in taxes and royalties to the central government, while the provincial administration received just Rp 200 billion in NNT dividends.
“The central government should understand that the poverty rate in West Nusa Tenggara is 23 percent, higher than the 13 percent national average,” said Kurtubi, who represents the interests of Multi Daerah Bersaing, the Bakrie-led consortium that holds a stake in the miner.
Meanwhile, NNT spokesman Rubi Purnomo said on Tuesday that the company was ready to cooperate with the State Investment Agency (PIP) to complete the deal.
But lawmakers on Friday said PIP was financed by the state budget, which would violate the government’s vow not to use state funds for the deal. West Nusa Tenggara is still courting investors for a consortium to acquire the shares, while West Sumbawa claimed backing from a relatively mysterious firm called Titan Metals.
Local protests over the divestment turned violent on Monday as thousands of people demanded the central government leave the shares to West Sumbawa.
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