Indonesia Prods State Miners to Buy Into Newmont Unit

Indonesia's minister for state enterprises said he wants state mining firms to have first right to buy shares in a unit of US gold miner Newmont Mining Corp, but analysts and some firms said they lack the funds.
An arbitration court last month ordered the foreign owners of PT Newmont Nusa Tenggara (NNT), which operates the Batu Hijau copper and gold mine in Sumbawa, to sell part of their stake to the government within six months after a long-running dispute.
However, with the 17% stake valued by Newmont at around $800m, analysts have said that neither the government nor the state-owned mines have the necessary funds.
That potentially poses problems for Newmont, which could fall foul of the ruling if it fails to find a buyer, but which could be pressured into dropping its price as the deadline approaches.
The Newmont case has attracted considerable interest from foreign investors particularly as some Indonesian politicians are taking an increasingly nationalistic approach over ownership and access to the country's rich natural resources against the backdrop of this year's elections.
"We have sent letters to the finance ministry, requesting state-owned miners to be given priority to buy the stakes if the government declines to buy it," Sofyan Djalil, state enterprises minister, told reporters on Tuesday, adding "Of course there should be a negotiation on prices."
Local media reports have cited state miner PT Aneka Tambang, coal miner PT Tambang Batubara Bukit Asam, and tin miner PT Timah as the state-owned firms most likely to consider buying the shares.
But analysts and two executives said the price was too high and that they lacked the financing.
"The funding needed is huge and our internal cash won't be able to cover it," said Timah corporate secretary Abrun Abubakar.
Bimo Satryo, Antam's corporate secretary, said the firm was waiting for an offer from the government on the stakes.
"We will have to review it first because it involves huge financing. It's not easy getting financing in this situation," said Satryo.