Amman Mineral to buy majority stake in Indonesian copper and gold mine for $2.6 bn

Indonesian investor group Amman Mineral Internasional yesterday struck a deal to buy a majority  82.2 per cent of Newmont Nusa Tenggara (NNT), operator of Indonesia's second-biggest copper and gold mine for $2.6 billion.

Under the deal, Amman Mineral Internasional will buy 56 per cent of NNT from US miner Newmont Mining Corp and Japan's Sumitomo Corp and its partners and the remaining 26.2 per cent from local companies.

Post closing, Newmont will receive $1.3 billion for its 48.5 per cent stake. Sumitomo will receive $350 million and an additional $202.5 million if certain conditions are met for its 27.56 per cent stake.

"Selling our stake in PT Newmont Nusa Tenggara for fair value is aligned with our strategic priorities to lower debt, fund our highest margin projects and create value for shareholders," said Gary Goldberg, president and CEO of Newmont.

Batu Hijau is a large, surface mine operation, primarily producing copper and small amounts of gold and silver. Originally discovered in 1990, commercial production began in 2000.
The Batu Hijau mine, one of Indonesia's largest copper deposits, is located in the southwest region of the island of Sumbawa, in the West Nusa Tenggara Province.

It produces 328,000 ounces of gold annually and 240 million pounds of copper.

Miners have been shedding assets due to a continued slump in commodities prices. Earlier this month, mining giant BHP Billiton agreed to sell its 75 per cent stake in IndoMet Coal to local producer PT Alam Tri Abadi.