Australia’s Newcrest seeks buyer for 26% stake in Indonesian gold mining firm

Photo: Newcrest Mining website

Australia-listed Newcrest Mining Limited is seeking a buyer for a 26 per cent stake in Indonesia-based gold mining company Nusa Halmahera Mineral (NHM) to meet regulatory requirements, a company executive told DealStreetAsia.

Newcrest is required to reduce its ownership in NHM from the current 75 per cent before 26 June 2020 in accordance with Indonesia’s mining law, the company’s investor relations and media head Christopher Maitland said.

JPMorgan is advising Newcrest on the deal.

According to Indonesia’s Energy and Mineral Resources Ministry (Permen ESDM) regulation no. 9/2017, foreign shareholders are required to gradually dispose of their stake in local firms to the central government, local government, state-owned companies, and then, local private companies. In case no potential buyers come forward, foreign investors can divest their holding through an initial public offering (IPO) on the Indonesia Stock Exchange (IDX).

According to the country’s mining law, a foreign investor is required to hold a maximum of a 49 per cent stake in a local mining company. Newcrest currently owns 75 per cent of NHM.

Indonesia’s state-owned mining company Aneka Tambang (Antam) holds a 25 per cent stake in NHM. As an existing partner, Antam has the right of first refusal, which makes it the first contender to acquire the stake from Newcrest, said Antam SVP corporate secretary Kunto Hendrapawoko.

However, Antam is yet to make a decision on the stake acquisition, he added.

A source familiar with the situation said Newcrest may sell its entire stake in NHM to Antam or another local buyer. According to Maitland, it is certainly an option for the Australian mining firm to divest its entire holding and the company remains open to all offers. But Newcrest has not committed to selling more than 26 per cent of NHM so far.

Both Newcrest and Antam hold the stake in NHM since 1994 under the Kontrak Karya or Contract of Work (CoW) status for Gosowong mine, located in Halmahera Island, North Maluku Province, per Newcrest’s website.

NHM’s Gosowong mine produces gold and silver dore, and the company has a processing plant with up to 800,000 tonnes of annual capacity. By the end of June 2018, the Gosowong mine had produced 251.390 ounces of gold. Since its operations in 1999, the mine has been producing more than four million ounces of gold, according to Newcrest’s website.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.