Newmont Mining (NYSE:NEM) said Thursday is selling its 48.5% stake in PT Newmont Nusa Tenggara, the operator of its Batu Hijau copper and gold mine in Indonesia, for $1.3 billion to PT Amman Mineral Internasional.
The amount, said the Denver-based miner, is comprised of cash proceeds of $920 million expected to be paid at closing and contingent payments of up to $403 million.
Newmont has been seeking to sell its local business after Indonesia banned raw ore shipments in January 2014 and put a progressive tax on concentrates.Nusa Tenggara Mining Corp., majority owned by Sumitomo Corp., has also agreed to sell its ownership stake to PT Amman.
Newmont has been seeking to sell its local business after Indonesia banned raw ore shipments in January 2014 and put a progressive tax on concentrates, a semi-processed ore that's shipped to smelters for processing into finished metal.
The move, said authorities, was part of a wider policy to boost revenue by turning Indonesia into a manufacturer of higher-value products and to encourage construction of domestic smelters and refineries.
The deal is expected to close in the third quarter pending regulatory approval and other closing conditions.
The open-pit Batu Hijau mine (meaning "green rock") was discovered in 1990 in the southwest region of Sumbawa island. It's Indonesia's second-biggest copper and gold operation, after Freeport-McMoRan Inc.'s Grasberg asset, which has the world's largest gold reserves.