Newmont Mining plans to sells its 48.5% interest in PT Newmont Nusa Tenggara (PTNNT), which operates the Batu Hijau copper and gold mine in Indonesia, for $1.3 billion to PT Amman Mineral Internasional (PT AMI). The terms of the transaction are $920 million that is expected to be paid at closing and contingent payments of $403 million tied to metal price upside and development of Elang. Nusa Tenggara Mining Corp., mostly owned by Sumitomo Corp., has also agreed to sell its ownership stake to PT AMI.

“Selling our stake in PTNNT 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. “We believe PT AMI, supported by Batu Hijau’s experienced team, will be well positioned to continue operating the asset successfully. We acknowledge and thank Batu Hijau’s employees, the government of Indonesia and our valued partner Sumitomo for their support as we work to execute a successful sale and transition.”

The transaction is expected to close in the third quarter following receipt of regulatory approvals and satisfaction of other conditions precedent. These conditions include government approval of the PTNNT share transfer; a valid export license at closing; concurrent closing of PT Multi Daerah Bersaing’s (PTMDB) sale of its 24% stake to the buyers; resolution of certain tax matters; and no material adverse events that would substantially impact the future value of Batu Hijau.

Newmont has delivered significant safety and profitability improvements at its operations, and strengthened its portfolio and balance sheet over the last three years. The company has generated $1.9 billion in proceeds from the sale of non-core assets and lowered net debt by 37% since 2013 while continuing to invest in profitable growth. Newmont acquired Cripple Creek & Victor in Colorado and added 5 million ounces (oz) of gold reserves by the drill bit in 2015. The company is also advancing four profitable development projects in the U.S., Australia and Suriname, which are expected to add up to 1 million oz of profitable production over the next two years.

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