Energy Minister Analyzes Newmont Acquisition by Medco

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  • TEMPO.CO, Jakarta - Sudirman Said, Minister of Energy and Mineral Resources, said that he is analyzing the mandate for Newmont Nusa Tenggara (NNT) to divest its shares. Sometime ago, Medco Energi Internasional said that a shares divestment is no longer necessary as Medco's acquisition against NNT is part of a nationalization.

    "We are still studying the divestment. Later, we will look at the requirements by looking at existing regulations. However, it was a good transaction, because it allowed the state to enter an industry in which we should have a bigger role," Sudirman said at the Coordinating Ministry for Economic Affairs' building on Wednesday, July 20, 2016.

    On June 30, 2016, Medco announced that it has acquired 82.2 percent shares in Newmont for US$ 2.6 billion. For the acquisition, Medco joined a consortium named Amman Minerals International, along with AP Investment under the support of Bank Mandiri, BNI and BRI who provided US$750 million of the acquisition funds.

    On July 14, Medco's chief commissioner Muhammad Lutfi stated commitment to build a smelter after acquiring Newmont. "The smelter construction is in stage of feasibility study. According to our calculations, we may be able to start building in early 2018," said Lutfi.

    Now that Medco has acquired Newmont, Lutfi hopes the government will no longer require a divestment by Newmont, as Medco is a company owned by Indonesians. "Newmont has been bought by Indonesians, so it's the same as nationalizing Newmont," Lutfi said.