Indonesian oil and gas company MedcoEnergi acquired an 82.2% interest in the Batu Hijau copper-gold mine on Sumbawa Island in Indonesia in late June when it acquired PT Amman Mineral Internasional (PT AMI) in a transaction valued at $2.6 billion.
Just prior to being acquired by MedcoEnergi, PT AMI obtained its 82.2% stake in Batu Hijau through separate transactions to purchase Newmont Mining’s 48.5% interest, Sumitomo Corp.’s 7.5% interest, and Indonesian company PT Multi Daerah Bersaing’s 26.2% interest in the mine. Newmont and Sumitomo’s interests in Batu Hijau were held in the Nusa Tenggara Partnership B.V., which held a total ownership interest in the mine of 56%. Newmont was the mine operator.
In a separate announcement, Newmont reported it will receive a total of $1.3 billion from PT AMI for its Batu Hijau interest, including cash proceeds of $920 million expected to be paid at closing and contingent payments of $403 million tied to metal price upside and development of the Elang exploration prospect near the mine.
Newmont Mining says it will receive $1.3 billion from selling its 48.5% interest in the Batu Hijau Indonesian copper-gold mine to PT AMI. (Photo: Newmont Mining)
Batu Hijau production attributable to Newmont totals about 240 million lb/y of copper and 328,000 oz/y of gold in concentrate.
All of the transactions were expected to close in the third quarter of 2016 following receipt of regulatory approvals and satisfaction of other conditions precedent.
Regarding MedcoEnergi’s acquisition of PT AMI, President Director Hilmi Panigoro said, “This transaction is immediately accretive for MedcoEnergi given the world-scale nature of the Batu Hijau operation. We are committed to maintaining high standards in safety, environmental stewardship, social responsibility and workforce quality that are the foundation of MedcoEnergi’s operational success to date. This will strengthen MedcoEnergi’s position as Indonesia’s premier independent energy and natural resources company and reaffirms our commitment to contribute to national development.”