•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   
•    EYEWITNESS   

The central government will abandon plans to acquire a 7 percent stake in PT Newmont Nusa Tenggara, which operates the lucrative Batu Hijau copper and gold mine in Sumbawa.

Muhammad Said Didu, secretary at the State Enterprises Ministry, said on Friday that the final stake to be offered was too small for the central government because it would not allow the ministry enough control over the operations of the company.

“The ministry’s principle is not to let our enterprises manage small stakes anymore. We are not stock traders,” he said.

“State mining companies still have lots of mining contracts that need investment. Why should we invest in Newmont when we can’t have control?” he added.

His statement comes only a month after State-Owned Enterprises Minister Mustafa Abubakar said the ministry planned to acquire the stake — a statement dismissed as “just plain lip service” by one analyst.

There should be no shortage of takers for the stake in NNT, which is being divested by global giant Newmont Mining, Newmont Nusa Tenggara’s parent company, under its contract with the government.

A Bakrie group-led consortium said in May that it was willing to pay $400 million for the stake — 10 percent less than the $444 million asking price.

PT Multi Daerah Bersaing — a consortium made up of the Bakrie group’s PT Multicapital and the local governments of West Nusa Tenggara, Sumbawa and West Sumbawa purchased 24 percent in two separate deals late last year — paying $493 million for a 14 percent stake and $391 million for a 10 percent stake.

“We would’ve still been interested in the remaining shares if Multi Daerah Bersaing had not acquired 24 percent, but we were beaten to it, so it’s pointless to acquire the remaining stake,” Said Didu said.

The Energy Ministry said in March that it wanted a cheaper price for the 7 percent NNT stake, although it didn’t say how much it was prepared to pay. The ministry also said at the time that it had not yet formed a team to assess the value of the remaining NNT stake because it was awaiting approval from the energy minister.

Under a 1986 contract with the government, NNT is required to divest 51 percent of its stake by 2010. It sold 20 percent to PT Pukuafu Indah in 1986.